Cardano [ADA] shed nearly 14% of gains it acquired over the week. However, it has managed to hold on to a psychological support area. This is because, even as Bitcoin’s downfall has had a ripple effect over the market, altcoins’ losses were less devastating.
After extending its decline against the US Dollar, Cardano [ADA] was found to be trading at a price of $1.03. Unlike several of its peers, the fifth-largest crypto-asset jumped on the recovery train and was noted a minor uptick of 1.39% over the past day. At the time of writing, ADA recorded a market cap of billion and a 24-hour trading volume of billion.
Cardano [ADA] 4-Hour Chart:
Cardano [ADA] price candles have been consolidating between the trendlines of a descending channel. As per convention, ADA could potentially undergo a bullish breakout upon completion of the pattern formation.
Apart from the positive short-term projection, the moving averages also signaled a bullish phase for the crypto-asset. The 50 DMA [Pink] continued to hover below the price candles and well above the 100 DMA [Blue].
Resistance for short-term break-outs stood at $$1.14, $1.3 and $1.45 respectively. On the other hand, support levels stood untested at $0.9 and $0.8 respectively.
Cardano [ADA] Daily Chart:
Cardano [ADA], the long-term prospects, however, does not look quite promising. The crypto-asset formed a head and shoulder pattern on the daily chart as depicted above with a neckline and three peaks. The price fell from the neckline level and hence, it was an indication of a bearish breakout.
Further validating the bearish presence was Chaikin Money Flow [CMF] indicator which dipped in tandem with ADA’s fall to the negative territory indicating a decline in capital inflow to the coin market.
The MACD also flipped on the red zone as the gauge formed after the bearish crossover continued to rise further suggesting bulls have lost control of the ADA market as demand took a major hit.
The RSI also dipped below the 50-median line and indicated a sentiment of a rising sell pressure in the market.
Despite hints of short-term bullish prediction, the macro outlook was strongly bearish. As noted by above charts, ADA could potentially consolidate before for some-time before sustaining an extensive loss. In which case, support levels of $0.9 and $0.8 could come into play while resistance levels stood unbreached at $1.2 and $1.3 respectively.