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Cardano (ADA) Faces Bearish Start to 2024 With 25% Price Decrease

2 mins
Updated by Ryan James
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In Brief

  • Cardano's (ADA) price was rejected by a long-term horizontal resistance area, creating several long upper wicks.
  • The weekly and daily time frame price action and RSI both support the continuing of the downward movement.
  • Despite the bearish ADA price prediction, reclaiming the $0.50 horizontal area can trigger a significant bounce.
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The Cardano (ADA) price created a lower high on January 11 and has fallen at an accelerated pace since.

Cardano is approaching a long-term horizontal support area, which previously provided resistance.

Cardano Sellers Take Over

The weekly time frame technical analysis shows that the ADA price has increased swiftly since September 2023. The increase culminated with a new yearly high of $0.68 in December. 

While this supposedly caused a breakout above a long-term horizontal resistance area, the price could not sustain its increase. Rather, it created several long upper wicks (red icons), considered signs of selling pressure. The ADA price fell sharply at the start of 2024

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

The weekly Relative Strength Index (RSI) gives a bearish reading. Traders utilize the RSI as a momentum indicator to assess whether a market is overbought or oversold and whether to accumulate or sell an asset.

If the RSI reading is above 50 and the trend is upward, bulls still have an advantage, but if the reading is below 50, the opposite is true. The indicator fell below 70, is in a downward trend, and is approaching 50. 

ADA Price Prediction: When Will Price Bottom?

A closer look at the price action and wave count from the daily time frame suggests that the ADA price trend is bearish.

Technical analysts use the Elliott Wave theory to determine the direction of a trend, which involves studying recurring long-term price patterns and investor psychology. Analyst Chris O suggests that ADA is in the first sell-off phase of this bull cycle.

This aligns with the wave count, which suggests ADA is in wave C of an A-B-C corrective structure (black).

Giving waves A:C a 1:1 ratio leads to a low of $0.41, lining up with the 0.618 Fib retracement support level (white). An ADA decrease of 13% from the current price is required to reach it. The decreasing daily RSI also supports the sentiment.

ADA Price Prediction
ADA/USDT Daily Chart. Source: TradingView

Despite this bearish ADA price prediction, a strong bounce at the 0.5 Fib retracement support level that reclaims the $0.50 area can trigger a 32% increase to the closest resistance at $0.62.

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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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