The Case for Cardano to Drop to 50 cents Before Bottoming
Cardano (ADA) has the potential to fall as low as $0.50. A major reason for this bearish scenario is ADA's descending channel, which the bears may try to tag again. This will be a classic break and retest price structure.
Descending Channel
A descending channel pattern has formed on ADA's daily chart, starting with the price falling from its all-time high of $3.09. The breakout to the upside has lost momentum, and now we have 3 bearish factors that align to call for more downside:
1. First, the bears have reclaimed the $1.00 psychological number after an initial failed rally.
2. Second, the RSI readings point lower as the oscillator is back below the 50 mid-level signaling bearish momentum.
3. Lastly, ADA's price is trading well below its 200-day simple moving average, which signals that we're in a bearish market.
Looking forward: The next major support to the downside comes near the current low of the year of $0.74. A daily break and close below this level will open up the door for ADA's price to test $0.50 and, subsequently, the upper slopping trendline of the descending channel.
Descending Channel
A descending channel pattern has formed on ADA's daily chart, starting with the price falling from its all-time high of $3.09. The breakout to the upside has lost momentum, and now we have 3 bearish factors that align to call for more downside:
1. First, the bears have reclaimed the $1.00 psychological number after an initial failed rally.
2. Second, the RSI readings point lower as the oscillator is back below the 50 mid-level signaling bearish momentum.
3. Lastly, ADA's price is trading well below its 200-day simple moving average, which signals that we're in a bearish market.
Looking forward: The next major support to the downside comes near the current low of the year of $0.74. A daily break and close below this level will open up the door for ADA's price to test $0.50 and, subsequently, the upper slopping trendline of the descending channel.
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