2023-6-29 13:00 |
The Cardano (ADA) price initiated a sharp bounce on June 10 but failed to sustain it. The ensuing decrease suggests that the trend is still bearish.
If the Cardano price loses the current horizontal support level, it could trigger a massive sell-off that takes the price to a new yearly low and beyond.
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Cardano Price Struggles to Sustain IncreaseThe technical analysis for ADA on the daily time frame indicates that the ADA price rebounded by 39% between June 10 – 25. The bounce began once the price fell to a new yearly low on June 10. Then, it reclaimed the $0.25 horizontal support area.
This also created a very long lower wick (green icon), signifying buying pressure. This suggests that there is buying pressure in the market, as sellers could not drive the price further down. Instead, buyers took control and caused the closing price to be much higher than the low point.
Despite the bounce, the ADA price failed to sustain the increase and has fallen since, nearly reaching the $0.25 area again.
ADA/USDT Daily Chart. Source: TradingViewIn addition, the weekly Relative Strength Index (RSI), which traders use to assess market momentum and determine whether an asset is overbought or oversold, shows a bearish reading.
When the RSI reading is above 50, the upward trend indicates an advantage for buyers, whereas a reading below 50 suggests the opposite. The 50 line and a descending trendline (black) rejected the RSI, both signs of a bearish trend.
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ADA Price Prediction: Wave Count Suggests Price Will Break DownA closer look at the wave count gives a bearish reading that suggests the ADA price will eventually break down from the $0.25 horizontal support area. Elliott Wave theory involves the analysis of recurring long-term price patterns and investor psychology to determine the direction of a trend.
The count suggests that the ADA price completes the fifth and final wave of a downward movement (white). Therefore, new lows are likely.
The price action also aligns with the bearish count. The ADA price has broken down from an ascending parallel channel, suggesting that it completed the corrective wave four and has now begun wave five. If the count is correct, the most likely target for the bottom of wave five is $0.17. The target is found by the 1.61 external retracements of wave four. A daily close below the $0.25 area will confirm that this is the correct count.
ADA/USDT 12-Hour Chart. Source: TradingViewDespite this bearish ADA price prediction, a movement above the wave one low of $0.35 will mean that the trend is still bullish.
In that case, the ADA price could resume its ascent to $0.50.
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The post Cardano (ADA) Price Recovery: Bullish Reversal or Relief Rally? appeared first on BeInCrypto.
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