- Cardano price tugs the $0.402 resistance level after its 72% rally.
- Investors should expect a steep correction to $0.321 due to the ongoing bearish divergence.
- A daily candlestick close that flips the $0.402 hurdle into the support floor will invalidate the bearish thesis for ADA.
Cardano price has shown a steady uptrend since December 30, 2022. However, in the last six days, ADA has been facing consolidation since it approached a major resistance level. Rejection at this level could trigger a steep correction for ADA.
Cardano price ready to nosedive
Cardano price action for the last six months shows a distinct top formation signal, i.e., bearish divergence. This formation is when the asset’s price produces higher highs, but the momentum indicator produces lower highs. This non-conformity or divergence indicates that the rally is not backed by anything and that a trend reversal is likely.
This signal was seen twice in the last six months, and currently, Cardano price has formed the longest bearish divergence. This sell signal has extended for more than three weeks while ADA has been tightly wound.
A sudden spike in selling pressure could spell disaster for Cardano price and trigger a 15% crash to the $0.321 support level.
ADA/USDT 1-day chart
A daily candlestick close that flips the $0.402 hurdle into the support floor will invalidate the bearish thesis for Cardano price. This barrier was a stable support level for nearly six months between May and November 2022 and was flipped to a blockade thereafter. Hence, reconquering this hurdle will attract more buyers that could trigger Cardano price to rally by 10% to $0.440.
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.