Cardano price hits a curb as ADA dips in search of support

Cardano (ADA) price has been on the right track these past few days, with a technical rally that saw bulls rejected by the 55-day Simple Moving Average (SMA) at $1.63, just a few ticks shy of the $1.68 significant historical level. ADA price gaps were lower this morning and looked to be pairing back most of the built-up gains from last week in search of support. Expect price action to dip further with support at $1.37 or $1.20.

Cardano bulls could undergo another 16% correction

Cardano price, together with most other cryptocurrencies, enjoyed the Christmas rally only to stall across the board yesterday evening. As markets are awakening after a long weekend of festivities, most indices are quoting in the red, and most cryptocurrencies are on the back foot, with the sentiment outlook for today rather grim. Expect Cardano price action to remain under pressure, searching for support throughout the day. 

The first level to watch is the green ascending trend line that acted as support during the rally and break higher on December 23, and then continued providing support in the days that followed. It will be essential to see if it can do this again because a break below could see losses that mount to 16%. If that is the case, expect ADA to dip towards $1.20 and the monthly S1 support level which is likely to  support price against further losses.

ADA/USD daily chart

If sentiment shifts to the upside, expect a retest of the 55-day SMA and, next, the historical $1.68 level,marked up on the chart. If bulls can make it through there, expect to see some choppy price action within a 20% profit range, as the monthly pivot, the 200-day SMA, and a historical resistance level all lie in that zone and could spark profit-taking with each test.