ADA has fallen by 0.59% in the past 24 hours and is now approaching the key $0.3544 level. The daily chart shows a bearish trend for ADAUSDT.
However, given the sideways trend across the cryptocurrency market, it appears to be in a consolidation period. Since the price has formed a range below the 0.35 resistance level, a decline in the price is likely to be needed to retest the support area.
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It is recommended to short ADA
As ADA approaches and consolidates below the critical $0.35 support level, the coin appears vulnerable. The entire cryptocurrency market remains in a sideways trend at the moment, and ADA faces additional downside pressure due to its failure to break out of the current range.
Looking at the daily timescale, ADA is currently trading between $0.30 and $0.34. On the daily chart, a doji candle has formed, which generally indicates that the market has no confidence in either direction. I think if this is the scenario that the market is looking forward to, then a retest of support around $0.325 or that area is likely.
Even though traders may find opportunities if the price stabilizes within the current range, the attitude remains unfavorable.
Moreover, if ADA fails to sustain above the $0.325 support, there are chances of a further drop towards the $0.30 area.
ADA to Drop 33% to $0.2197?
ADA has just broken out of a rising wedge as trading volumes increase, although this was not the positive breakout many were expecting.
Research suggests that Cardano was strengthening a strong negative trend on the daily chart by closing the gap below the EMA200 line and a bearish trendline, forming a rising wedge pattern, but a series of strong bearish candles crushed it before it could break out.
Furthermore, the MACD also contained a bearish crossover, adding vigour to the market. This was not what the bulls were expecting, Cardano simply suffered a sharp fall, breaking out of the rising wedge and seeing a massive surge in volume.
To make matters worse than all this, the MACD line is below the signal line, which suggests that the bears are becoming more pessimistic.
Since all these signs are negative, I predict that ADA could drop to Target Zone 1 at 0.2506 or a bigger drop to Target Zone 2 at 0.2197 (these targets were drawn using Fibonacci ratios 1.272 and 1.618).
However, this situation has been changing, so if the ADA price breaks above the resistance at 0.3815, then the bulls can hold out some hope.
Finally, investing in cryptocurrency is a high-risk behavior. We need to be cautious in investment decisions and do sufficient research and risk assessment. At the same time, we also need to keep a cool head, not be swayed by market fluctuations, and make decisions that are in line with our investment strategy.
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