On May 16, Cardano (ADA) reached a high of $0.101 and €0.089. A rapid decrease followed. A bottom was reached the next day when a reversal brought a slight recovery.
However, the price was not able to regain May 16’s highs. Until May 22, general volatility was experienced. Then a more rapid drop brought ADA to a lower lows than experienced on May 17.
After a weak rebound, the price reached lows of $0.073 and €0.067 reached on May 23. Currently, ADA appears to be on an upward trend.
How high will Cardan reach before another the bears take over again?
Let’s find out!
Cardano (ADA): Trends and Highlights for May 24, 2019
- Cardano reached a high on May 16 and has been on a downtrend since.
- It has been trading inside a descending channel.
- In the long-term, ADA has created a possible double top.
- Bearish divergence is developing in the RSI and the MACD.
- There is support near $0.065 and €0.057.
On May 14, the price reached a low of $0.077. A rapid increase was followed by a gradual decrease. On May 17, the price made a high of $0.091.
ADA has since been decreasing within the descending channel outlined below:
ADA reached the support line on May 23 and is currently nearing the resistance line. It is likely that the price will continue trading inside the confines of this channel until a decisive move occurs.
Possible Double Top
While it appears as if ADA might reach the resistance line, it might also suffer a reversal before reaching this level. To determine future short-term movements, the price is analyzed in a daily time-frame alongside the RSI and the MACD below:
ADA reached similar highs near $0.1 on Apr 3 and May 16. This could represent the formation of a double top pattern. Because this is a bearish reversal pattern, we’d expect price losses.
Since May 16, the price has been dropping within the short-term ascending channel outlined in the first section. This seems to confirm the existence of the double top.
Bearish divergence also developed in the RSI and the MACD between these two dates. This was especially evident in the MACD. Furthermore, the daily candlesticks of Apr 3 and May 16 had long upper wicks, indicating that there is selling pressure in the market.
These indicators suggest that the price of ADA is likely to continue falling within the ascending channel. While the resistance line may be validated in the short-term, price should soon drop back to the support. Overall, we expect continued gradual losses for the foreseeable future.
To better predict where the price of Cardano might land following a possible breakdown, we incorporate support areas into the analysis.
The closest support area is found near $0.065 and €0.057. We believe the price will eventually reach this area.
A breakdown from the current pattern is required for the price to reach this area in the short term. However, if the price keeps declining at the rate predicted by the channel, this level could be reached in the longer-term without a breakdown.
Summary of Analysis
Based on our analysis, the price of ADA will likely reach the support line of the short-term channel. Afterward, we believe it may break down from the trading pattern traced between May 16 and 24. This would cause the support area around $0.065/€0.057 to be reached in the short-term.
Maintained losses at the rate predicted by the channel, however, will also ADA into the support area over the longer term without a breakdown.
Do you think the price of ADA will break down from the channel? Let us know in the comments below.
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Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.