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Cardano (ADA) Price Loses Key Support – Does 16% Drop Await?

3 mins
Updated by Ryan Boltman
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In Brief

  • The ADA price has broken out from diagonal and horizontal resistance levels but failed to sustain its increase, falling sharply since July 14.
  • The daily and six-hour timeframes both provide bearish readings, suggesting that the downward movement is expected to continue in the near term.
  • The Cardano price prediction will be instead deemed bullish if the price reclaims a short-term ascending support line from which it recently broke down.
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The Cardano (ADA) price broke down from a short-term ascending support line, a sign that the previous upward trend has ended.

The price could approach its yearly low if the downward movement continues. However, there are no imminent signs that ADA will fall to a new yearly low.

Cardano Price Fails to Sustain Breakout

The technical analysis on the daily time frame indicates a bearish outlook for ADA’s price for several reasons.

Firstly, ADA recently broke out of a short-term descending resistance line that had been in place since April 13. This breakout is a strong and clear bullish signal, indicating the end of the bearish trend and the start of a new bullish trend.

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Cardano (ADA) Price Prediction 2023/2025/2030

However, ADA failed to sustain its increase and was rejected by the $0.36 area (red icon). This catalyzed a decrease that took the price back to its pre-breakout levels.

Cardano (ADA) Price Daily
ADA/USD Daily Chart. Source: TradingView

Additionally, the daily Relative Strength Index (RSI) provides a bearish reading. The RSI is a momentum indicator used by traders to assess whether a market is overbought or oversold and to make decisions about accumulating or selling an asset.

Currently, the RSI reading is below 50 and trending downwards (red circle), indicating that the trend is bearish. 

However, it is worth mentioning that Cardano’s founder Charles Hoskinson announced a network upgrade that will greatly increase the speed and efficiency of the Cardano blockchain.

ADA Price Prediction: Short-Term Breakdown Accelerates Price Drop

Examining the shorter-term six-hour timeframe gives a bearish reading.

To begin with, the Elliott Wave count indicates the completion of an A-B-C corrective structure (black). As this correction is upward-facing, it suggests a probable bearish trend. Technical analysts utilize the Elliott Wave theory to identify recurring long-term price patterns and investor psychology, aiding them in determining the trend’s direction.

This was confirmed when the ADA price breached the short-term ascending support line on July 31. This is a sign that the previous increase of 72% has ended and a new decrease has begun.

Moreover, the six-hour Relative Strength Index (RSI) is bearish, since it is below 50 and decreasing.

Cardano (ADA) Price Prediction
ADA/USDT Six-Hour Chart. Source: TradingView

Despite this bearish short-term ADA price prediction, a potential reversal could take the price back to the ascending support line at $0.33. In that case, the line will be expected to provide resistance.

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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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