See More

Cardano (ADA) Price Cools After 68% Increase, but Is Second Phase Incoming?

2 mins
Updated by Geraint Price
Join our Trading Community on Telegram

In Brief

  • Cardano (ADA) broke down from a short-term ascending wedge.
  • It is approaching support at $0.327.
  • Cardano (ADA) is in an A-B-C corrective structure.
  • promo

The Cardano (ADA) price broke down from a short-term pattern and is nearing a crucial support level at $0.327.

ADA is the native token of the Cardano network. Its founder, Charles Hoskinson, recently tweeted about whether the Cardano blockchain should add KYC to its Layer 1 protocol. He argues KYC verification can co-exist with a decentralized protocol.

Cardano Price Loses Momentum

The Cardano price increased by 68% in Jan., leading to a high of $0.399 on Jan. 31. The upward movement continued for two more days, but the price has fallen since. 

The decrease was preceded by a considerable bearish divergence in the daily RSI (green line). The indicator is now at risk of falling below 50. This is a sign of a bearish trend and could indicate that the upward movement is complete. 

In any case, the price is also close to the $0.327 support area, created by the 0.5 Fib retracement support level and a horizontal support area. Due to this confluence, the area could initiate a bounce back to $0.40. 

However, since there is no more support below that area, a close below it could trigger a sharp fall to $0.25. Since it would also cause the daily RSI to decrease below 50, it could mean that the upward trend is complete.

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

Cardano Price Begins Short-Term Drop

The technical analysis from the short-term three-hour chart suggests that the price is still correcting the entire upward movement that began in Jan. The increase was a five-wave upward movement (black), in which wave five developed into an ending diagonal, hence the shape of the wedge.

If correct, the ADA token price is now nearing the bottom of the A wave in an A-B-C corrective structure. It is right at the top of the $0.327-$0.348 support area, created by the 0.382-0.5 Fib retracement support level. Therefore, the price is likely nearing the bottom of the A wave and will soon begin a relief rally.

Afterward, the entire correction could end at the 0.5 Fib retracement support level at $0.327.

Cardano (ADA) Price Count
ADA/USD Three-Hour Chart. Source: TradingView

To conclude, the most likely Cardano price forecast is a gradual consolidation toward $0.327 before an upward movement that takes the price to $0.40. A daily close below $0.327 would invalidate this bullish outlook and could send the ADA price to $0.25.

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

Top crypto projects in the US | June 2024

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