- Cardano price is down by 8% since tagging the $0.36 price level.
- ADA could decline by 16% but still remain bullish in the long term.
- The uptrend would be deemed void if $0.239 were breached.
Cardano price is witnessing the first signs of a correction following the 55% rally established this winter. This thesis analyzes previous market behavior and technical indicators to forecast a plausible scenario for ADA in the weeks to come.
Cardano price shows potential for more gains
Cardano price saw its strongest red day this year as the smart contract token fell by 7% on January 18. The decline came after three days of consolidation near the $0.35 zone. The 8-day exponential moving average, which served as a support level during a 3-day grapple, eventually gave way and has now acted as resistance on shorter time frames.
Cardano price currently auctions at $0.3385. A Fibonacci retracement tool surrounding the 55% rally shows the current pullback as a shallow 23.6% retracement. Normally after strong impulsive rallies, a corrective decline takes place, bringing the value of an asset down to the 50 or the 61.,8% Fib level. If this is the case, Cardano could fall between 12-16% and still have the potential to rally again. Key bullish targets would be November's swing high at $0.43, resulting in a 28% uptrend move from today’s ADA price.
ADA/USDT1-Day Chart
The bears have yet to breach the ascending trendline, which provided support for ADA during the initial stages of the new uptrend. Additionally, the volume indicator shows fewer transactions during the current selloff than when the price ascended, which suggests investors are refraining from taking profit in hopes of higher targets.
Combining all these factors, the next dip in the ADA price could be a good entry point for sidelined bulls to enter the market. The uptrend potential would be void if the origin point of the rally at $0.239 were breached. If the aforementioned level is breached, the Cardano price could fall into the psychological $0.20 zone, an untagged liquidity level from 2020. The bears would accomplish a 40% decline if successful.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Arbitrum’s ARB price rallies after Chainlink CCIP mainnet launch
The protocol’s arrival on Arbitrum is key to the further development and growth in the ARB ecosystem as it is expected to improve the user experience and attract developers.
BTC downside likely after 20-week EMA culls bulls
Bitcoin (BTC) bearish price fractal, as discussed in a previous article, is underway, but the lack of volatility is causing ambiguity and doubt. Regardless, BTC might see a bit of an upside before the long-term bearish scenario plays out.
FTX fights to clawback $157 million from former employees while creditors struggle with $7.9 billion in claims
FTX exchange has sued former employees of Salameda, a Hong Kong based entity affiliated with the trading platform. The court filing shows that the bankrupt exchange seeks to recover $157.3 million from Salameda employees.
First Ethereum futures ETF expecting approval by October 2
The first Ethereum futures ETF (exchange-traded fund) is likely to be approved on October 2, according to crypto hedge funder Hal Press. The North Rock Digital founder’s thesis is based on the recent events in the crypto ecosystem.
Bitcoin: BTC downside likely after 20-week EMA culls bulls
Bitcoin (BTC) bearish price fractal, as discussed in a previous article, is underway, but the lack of volatility is causing ambiguity and doubt. Regardless, BTC might see a bit of an upside before the long-term bearish scenario plays out.