After witnessing a series of drops in the past weeks, Cardano reached a critical trading area where a major bounce or breakdown may come into play. Now negotiating for the next direction.
The price of Cardano looks overstretched following past weeks of negative actions across the market. Due to the extreme drop in price, the asset appeared to have entered an oversold zone on the daily time frame.
It is currently trading at a critical level and at the same time testing the channel’s lower boundary that has been serving as a support line since last December. As shown on the chart, the price slightly dropped off this support line. But there’s still a chance for a recovery if a bounce occurs.
Two things are likely to happen from here: a clear breakdown of this channel would technically lead to an extension of the existing trend, which may last to the $0.26 level before it finds a lay-by.
Or a solid rebound to signal a buyback. This setup could stir a strong conviction for buying, which could as well rally the price to the upper boundary of the channel in the coming months.
However, ADA’s bullish trajectory is still valid from a mid-term perspective. But looking at the setups on a short-term scale, the trend remains in favour of the bears. A reversal from the current trading level should bring the bulls back in the market.
Cardano’s Key Levels to Watch
While the price looks poise for a breakdown, the nearest support level to watch for a leg down is $0.357 and potentially $0.34. The next level to consider below these price levels is $0.323.
For a rebound, ADA would need to reclaim the $0.376 resistance level before pushing higher to $0.40. The resistance levels to watch above are $0.42 and $0.44.
Key Resistance Levels: $0.376, $0.40, $0.42
Key Support Levels: $0.357, $0.34, $0.323
- Spot Price: $0.366
- Trend: Bearish
- Volatility: Low
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
Image Source: moxumbic/123RF // Image Effects by Colorcinch