See More

Cardano (ADA) Price Recovery: Bullish Reversal or Relief Rally?

3 mins
Updated by Ryan James
Join our Trading Community on Telegram

In Brief

  • Technical analysis shows ADA's price rebounded by 39% between June 10-25 but has since fallen, nearing the $0.25 area again.
  • The wave count and price action both support the possibility of further downside for the ADA price, with a new yearly low in the cards.
  • Should the ADA price reclaim the $0.35 mark, it would confirm the bullish trend reversal, indicating positive market movement.
  • promo

The Cardano (ADA) price initiated a sharp bounce on June 10 but failed to sustain it. The ensuing decrease suggests that the trend is still bearish.

If the Cardano price loses the current horizontal support level, it could trigger a massive sell-off that takes the price to a new yearly low and beyond.

Cardano Price Struggles to Sustain Increase

The technical analysis for ADA on the daily time frame indicates that the ADA price rebounded by 39% between June 10 – 25. The bounce began once the price fell to a new yearly low on June 10. Then, it reclaimed the $0.25 horizontal support area.

This also created a very long lower wick (green icon), signifying buying pressure. This suggests that there is buying pressure in the market, as sellers could not drive the price further down. Instead, buyers took control and caused the closing price to be much higher than the low point.

Despite the bounce, the ADA price failed to sustain the increase and has fallen since, nearly reaching the $0.25 area again. 

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

In addition, the weekly Relative Strength Index (RSI), which traders use to assess market momentum and determine whether an asset is overbought or oversold, shows a bearish reading.

When the RSI reading is above 50, the upward trend indicates an advantage for buyers, whereas a reading below 50 suggests the opposite. The 50 line and a descending trendline (black) rejected the RSI, both signs of a bearish trend.

ADA Price Prediction: Wave Count Suggests Price Will Break Down

A closer look at the wave count gives a bearish reading that suggests the ADA price will eventually break down from the $0.25 horizontal support area. Elliott Wave theory involves the analysis of recurring long-term price patterns and investor psychology to determine the direction of a trend.

The count suggests that the ADA price completes the fifth and final wave of a downward movement (white). Therefore, new lows are likely.

The price action also aligns with the bearish count. The ADA price has broken down from an ascending parallel channel, suggesting that it completed the corrective wave four and has now begun wave five. If the count is correct, the most likely target for the bottom of wave five is $0.17. The target is found by the 1.61 external retracements of wave four. A daily close below the $0.25 area will confirm that this is the correct count.

Cardano (ADA) Price Count
ADA/USDT 12-Hour Chart. Source: TradingView

Despite this bearish ADA price prediction, a movement above the wave one low of $0.35 will mean that the trend is still bullish.

In that case, the ADA price could resume its ascent to $0.50.

For BeInCrypto’s latest crypto market analysis, click here.

Top crypto projects in the US | April 2024
Harambe AI Harambe AI Explore →
Coinbase Coinbase Explore →
Chain GPT Chain GPT Explore →
iTrustCapital iTrustCapital Explore →

Trusted

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.

Valdrin-Tahiri.jpg
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)
READ FULL BIO
Sponsored
Sponsored