2023-7-27 12:36 |
The Cardano (ADA) price is trading slightly above diagonal and horizontal support after failing to sustain its increase due to a previous breakout.
Whether the price bounces or breaks down could be the catalyst that determines the future trend’s direction.
Cardano Price Bounces After BreakoutThe daily time frame technical analysis shows that the ADA price outlook is positive for several reasons.
To start with, ADA recently broke out of a short-term descending resistance line that had been present since April 13. This breakout serves as a strong and clear bullish signal. It means that the bearish trend is over, and a new bullish trend has begun.
Furthermore, the price successfully reclaimed the $0.30 area, which is now expected to act as support. Even though the price has not bounced, transaction volume reached a 3-month peak as bulls defended the area.
Read More: Cardano (ADA) Price Prediction 2023/2025/2030
Following the breakout, the price temporarily dropped but found support at both the previously mentioned resistance line and the $0.30 area before rebounding (green icon). If the bounce continues, the next resistance will be at $0.36, a 15% increase from the current price.
ADA/USDT Daily Chart. Source: TradingViewAdditionally, the daily Relative Strength Index (RSI) gives a bullish reading. Traders utilize the RSI as a momentum indicator to assess whether a market is overbought or oversold and to determine whether to accumulate or sell an asset. I
f the RSI reading is above 50 and the trend is upward, bulls still have an advantage, but if the reading is below 50, the opposite is true. The indicator is currently above 50 and trending upwards (green circle), suggesting a bullish momentum.
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Will Short-Term Structure Hold?A look at the shorter-term six-hour time frame gives a more undetermined reading.
Firstly, the wave count shows a completed A-B-C corrective structure (black). Since the correction is facing upward, the trend is likely bearish. Technical analysts employ the Elliott Wave theory as a means to identify recurring long-term price patterns and investor psychology, which helps them determine the direction of a trend.
If this is true, the ADA price will break down from the short-term ascending support line and decrease to $0.25. This is a drop of 18%, measuring from the current price.
However, the six-hour RSI is undetermined, failing to confirm if the ADA price will break out or down. The indicator is moving above and below 50, indicating an undetermined trend.
ADA/USDT Six-Hour Chart. Source: TradingViewTherefore, the Cardano price prediction will determine whether ADA bounces at the short-term ascending support line or closes below it. In case of a bounce, an increase to at least $0.36 will occur. However, a breakdown could lead to a drop to $0.25.
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The post Cardano (ADA) Price Holds Strong at $0.30: A Bounce in Sight? appeared first on BeInCrypto.
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