Cardano (ADA) price is showing bearish signals on several timeframes. This could accelerate the ongoing downward movement.
Besides failing to break out of long-term resistance, ADA price has broken out from a short-term pattern. This strengthens the downward price trend.
Cardano price rebounded but failed to recover the resistance
ADA is the native token of the Cardano blockchain, created by Charles Hoskinson. The price of the ADA token has fallen sharply over the past two weeks, as evidenced by the long-term weekly time frame readings.
This created a bearish engulfing candlestick, which is a type of bearish candlestick that erases the entire increase of the previous period. Confirmation of this bearish pattern comes with a closing lower than the opening of the previous period.
Moreover, this candle caused ADA price to drop below the important horizontal area of $0.425. This is an important development because it shows that the previous hack was not valid.
As a result, instead of acting as support, the $0.425 area will now act as resistance again. This was particularly evident last week. Despite the rebound, ADA price failed to reclaim the $0.425 area, instead confirming it as resistance (red icon).
So, despite previously breaking out of a descending resistance line that has been in place since the all-time high, the recent price action indicates a downtrend. If this decline continues, the next closest support area will be at the $0.315 average price.
The weekly RSI provides no hints of trend direction. The RSI is a momentum indicator that traders use to assess whether the market is overbought or oversold, and to determine whether to accumulate or sell an asset.
Readings above 50 and bullish indicate that the bulls still have an advantage, while readings below 50 indicate the opposite. The current reading of 50 is a sign of a neutral trend.
ADA Price Forecast: How Long Will It Go Down?
The daily time frame technical analysis also gives a bearish prediction for Cardano price. The reasons for this can be attributed to both price action and indicator readings.
First, on April 20, the price of the ADA token collapsed from an upward parallel channel that had been trading since March 10. This type of channel is characterized by the price moving between parallel resistance and support lines and is generally considered bearish. pattern.
After the crash, the ADA confirmed resistance on April 27 (red icon) before resuming its descent.
Secondly, the daily Relative Strength Index (RSI) also contributed to this trend as it broke down from the ascending support line (represented by the green line) which is currently below 50.
Traders usually use the RSI as a momentum indicator to identify overbought or oversold conditions and decide whether to sell or accumulate an asset.
In order to invalidate this bearish Cardano price prediction, ADA price must reclaim the channel support line.
In this case, an upward move to $0.48 may follow.
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In line with 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 and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.