Cardano ($ADA) is trending near a key area in a descending triangle, and analysis highlights two possible price scenarios.
The recent downtrend has pushed $ADA to the lower support trendline of a tightening descending triangle, suggesting an imminent breakout. How it handles this level would be important in its subsequent direction.
Key Points
- Cardano ($ADA) is trending near a key area in a descending triangle, and analysis highlights two possible price trend scenarios.
- Cardano entered this triangle since the 2021 peak of $3.10, shuffling between the structure’s top and bottom.
- Cardano dropped to $0.22 last week, aligning with the bottom of a descending triangle on the weekly chart.
- $ADA could still fall below the lower support level, targeting sub-$0.20, and remain there for a while.
- However, Cardano and the broader crypto market could “break rules and patterns,” with the former targeting a breakout to $2.99.
Price Scenarios for Cardano
Analysis from Cobra Vanguard identified this crucial area in a recent TradingView commentary. Cardano dropped to $0.22 last week, aligning with the bottom of a descending triangle on the weekly chart.
Cardano entered this triangle following the 2021 peak of $3.10, shuffling between the structure’s top and bottom. Earlier attempts to break above have proven abortive, with the lower support successfully cushioning downward momentum so far.
While the cryptocurrency has rebounded 18% from last week’s low to its current price, the possibility of a downward move remains. Cobra Vanguard highlighted this as one of the likely scenarios for Cardano, noting that it could still lose this support.
If this does happen, the analyst suggested that $ADA would drop below $0.20 and could stay there for a while. Notably, the coin has not fallen below this level since breaking above it in January 2021 to reach the current all-time high and the descending triangle’s top around $3.10.
Breaking below this level places Cardano on course to retest lower support levels at $0.077. Further weakness could drive the asset to its historical price lows around $0.017.
$ADA Could “Break Rules and Patterns”
However, the analysis also identified that Cardano and the broader crypto market could “break rules and patterns.” In the meantime, the sector is aligning with the four-year cycle, with Bitcoin peaking at $126,200 in October, then dropping almost 50% from there.
Although most indicators point to a bear market, Cobra Vanguard noted that there is still room for a break in the pattern, which could steer a market recovery. In this scenario, he expects $ADA to break above the descending triangle and target higher prices.
Specifically, he sees a push above $0.60 as the first possible step to confirm the breakout before a rally to $2.99. From the current market price of $0.266, this represents a 1,024% price increase.
In the meantime, Cardano remains weak with bears on top. The scenario in which $ADA and the crypto market regain bullish momentum remains highly contentious, with some analysts predicting it could take months.
