ADA bulls beware, breaking $0.63 could send Cardano to $0.51

Drew Dosek Verified Investing

As the broader crypto market attempts to bounce from the collapse witnessed on Friday, Cardano ($ADAUSD) finds itself immediately facing its first critical test right at $0.7260.

Technical analysis shows that Cardano’s decline broke through a declining trendline that had successfully held support twice throughout the month of September. This broken trendline has now flipped and become the most immediate line in the sand for price to establish a higher move.

Should the price manage to eventually break above this short-term resistance, bulls can look toward the next levels at $0.7665. The ultimate resistance target, however, remains the top of the large red candle from last Friday’s washout, sitting at $0.8148.

While pursuing these upside targets, Cardano bulls must keep a very close eye on the bottom of the current inclining parallel channel, located at $0.6369. If this crucial channel floor breaks, the near-term structure is invalidated, and price could drop sharply, targeting a complete washout back down toward $0.51.