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Thenewscrypto

02/06/2024

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Cardano (ADA) Testing Support at $0.46: How High Will ADA Go?

Cardano (ADA) price has decreased recently, trading below a descending resistance level. ADA reached a high of $0.69 in December but has struggled to regain bullish momentum, currently at $0.48. ADA fell over...

Cardano (ADA) Testing Support at $0.46: How High Will ADA Go?
  • Cardano (ADA) price has decreased recently, trading below a descending resistance level.
  • ADA reached a high of $0.69 in December but has struggled to regain bullish momentum, currently at $0.48.
  • ADA fell over 35% from its peak to $0.45 on January 23rd.

The price of Cardano (ADA) has drifted lower in recent days, now trading under a key descending resistance level. After hitting a high of $0.69 in December, ADA has struggled to regain bullish momentum. It currently trades at around $0.48.

According to technical analysis, ADA fell over 35% from its peak to hit a low of $0.45 on January 23rd. That drop briefly breached, but did not close below, a long-term horizontal support zone around $0.46.

That area marks a crucial decision point for the trend. Cardano is quickly approaching the convergence of that horizontal support and the descending resistance line that has capped price action since December.

Where is Cardano headed?

A daily relative strength index (RSI) indicator gives mixed signals on whether bullish or bearish momentum dominates currently. While the RSI line is trending up off oversold levels, it remains below the 50 threshold that typically separates bull from bear trends.

Analyzing the short-term two-hour chart suggests a bearish outlook in the very near term. Cardano recently broke support on an ascending trend line that contained price action through the January 23rd bounce. Breaking such a support generally indicates a temporary trend reversal.

However, the two-hour RSI is also rising while still below 50, signaling conflicting momentum. This means traders should watch for a decisive breakout or breakdown near current prices around $0.48 to $0.50.

If bearish momentum accelerates, ADA could drop another 5% towards minor support around $0.47. More significant losses past that level risk violating the higher major support and downtrend.

On the other hand, reclaiming the recently broken ascending trend line just overhead could provide fuel for a bounce back above $0.50. In that scenario, upside resistance is seen around $0.53, representing 6% upside from the current trade price.

Despite the murky short-term outlook, some analysts remain highly bullish on Cardano over the long run. Price targets as high as $4 to $8 have been floated based on previous price cycles and patterns. 

Seasoned Crypto Content Writer, Editor and Journalist who entered the cryptocurrency industry out of sheer passion and love for writing.

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