Cardano Price Forecast: ADA bulls need to hurry up as bears want to trigger 15% decline
|- Cardano price has seen its price action increase by 56% in January.
- ADA price sees bulls chewing on a very difficult area to break through.
- Bulls need to speed up the breach as bearish headwinds are emerging and growing quickly.
Cardano (ADA) price has had a steep rally that has seen a technical path respecting the several barriers we have sketched on the daily price chart. From the looks of it, bulls are currently fretting about how to breach above $0.388 as clearly that level and below near $0.384 are forming issues. Meanwhile, in the background, more tail risks are emerging again and are causing headwinds and headaches, which means that more bulls will be lured into profit-taking with a structural risk of this rally breaking down. Here is what you need to watch.
Cardano price sees bears catching up
Cardano price has seen bulls recovering ground with little resistance these past few weeks as markets ignored comments from central bankers and had the data on their side as clearly inflation is further declining in a straight path. It would, however, be foolish to think or believe that inflation would easily go as it has come. While several sectors are issuing warnings again on the shortage of certain basic materials, morale and access to credit are declining worldwide.
And if that does not convince you, the green light for delivery of German and American tanks to Ukraine has suddenly ballooned the geopolitical risk to its original size from last year after a brief hiatus these past few weeks. It is becoming clear that bears are catching up as bulls are tempted to profit since more upside potential looks limited. Should those mentioned headwinds grow further, expect a break of the green trend line to see a quick nosedive move toward $0.324 and possibly even $0.297 in search of support as a larger risk premium gets priced in again.
ADA/USD daily chart
Should the bulls get some outside help from the Federal Reserve next week or the PCE Deflator numbers on Friday, that would be a welcomed catalyst to lift them over the $0.388 level. Although upside still remains limited with the Relative Strength Index (RSI) near overbought territory again, $0.421 should be granted with another 9% profit to be added and a better buffer to withstand any corrections from the earlier mentioned tail risks.
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