In the daily chart, the Cardano price action moves under the influence of a strong resistance trend line, leading to multiple lower-high formations. The downtrend even breaks below the crucial support level of $0.25, leading to a steeper correction rally.
Cardano is currently trading at $0.244, down 0.41% today. Last night, the price hit the $0.25 ceiling and fell back down, creating a long-tail candle. It represents the ADA price retesting the broken $0.25 range and suggesting an upcoming downward trend.
Parallel to the downtrend, the ADA price action mimics a head and shoulder pattern formation with the neckline at $0.25. And the recent breakdown also signifies the bearish pattern breakdown in the Cardano coin price action.
According to the trend-based Fibonacci retracement, the next crucial support level is at $0.222 and $0.20 after the breakout of $0.235.
The bearish pattern breakout projects a potential downtrend to $0.15, accounting for a 37-40% correction.
Coming to the technical indicators, the RSI indicator displays a bullish divergence. As the ADA coin price transcends below $0.25. but the RSI line sustains over the oversold boundary. Meanwhile, the MACD indicator gives a bearish crossover. However, the sellers struggle to increase the bearish gap between the MACD and the signal line.
Will Cardano Find A Bounceback in 2023?
If the Cardano coin price breaks under the $0.235 support level, the downtrend continuation is expected to continue to the $0.20 mark. Moreover, the RSI indicator displays a strong bullish divergence in the daily chart, signaling a bullish revival soon.
However, on the flip side, a bullish reversal from $0.235 can again challenge the resistance trend line, accounting for a price jump of 10% to reach $0.25.
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Sohrab is a passionate cryptocurrency news writer with over five years of experience covering the industry. He keeps a keen interest in blockchain technology and its potential to revolutionize finance. Whether he's trading or writing, Sohrab always keeps his finger on the pulse of the crypto world, using his expertise to deliver informative and engaging articles that educate and inspire. When he's not analyzing the markets, Sohrab indulges in his hobbies of graphic design, minimal design or listening to his favorite hip-hop tunes.
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