2023-1-23 14:00 |
The Cardano (ADA) price broke out from a descending resistance line and is targeting $0.425. However, the Cardano short-term price prediction is bearish due to the creation of a bearish pattern.
Jan. could bring one of the most positive Cardano news yet. Djed, a crypto-backed over-collateralized stablecoin which ADA backs, will launch on the Cardano blockchain platform this month.
Djed will be over-collateralized by 400% to 800%. No exact date for the release has been specified yet. The total value locked (TVL) in the Cardano ecosystem has skyrocketed, possibly in anticipation of the launch.
Cardano Price Breaks out From 256-Day Resistance LineSince May 10, the price of Cardano has fallen below a declining resistance line. Following that, the price dropped on Dec. 30 to a low of $0.238. But, the ADA price has gone up since then.
The price was rejected by this line four times throughout the downward movement (red icons). The most recent occurred on Jan. 14. Since lines become weaker each time they are touched, the ADA price broke out on Jan. 20 and reached a high of $0.387 on Jan. 22. If the increase continues, the next resistance would be at $0.425.
At the time of the breakout, the line had been in place for 256 days. Breakouts from such long-term structures often lead to considerable increases. Therefore, a movement above $0.425 could accelerate the increase further.
However, there are mixed signs between technical indicators and the price action. Despite the breakout, the daily RSI is in the process of generating bearish divergence (green line). Moreover, it could fall below 70. Both are considered bearish signs.
Therefore, a look at a lower time frame is required in order to determine if the increase will continue.
ADA/USDT Daily Chart. Source: TradingView Cardano (ADA) Short-Term Price Prediction: Retracement Before RallyThe technical analysis from the six-hour time frame suggests that the ADA price is likely to decrease before resuming its rally.
The two main reasons for this are the creation of an ascending parallel channel, which is considered a bearish pattern and the bearish divergence in the RSI (green line).
Currently, the ADA price is at the resistance line of the channel. A fall below the midline would go a long way in suggesting that the breakdown will occur. This could transpire over the next 24 hours.
If the ADA price breaks down, it could decrease to the 0.5 Fib retracement support level at $0.313. This is also a horizontal support area.
ADA/USDT Daily Chart. Source: TradingViewTo conclude, the ADA price increased massively in Jan., likely due to the excitement from positive Cardano news. However, the Cardano short-term price prediction is bearish, suggesting that a retracement is due before a rally. A breakdown from the ascending parallel channel would confirm this.
On the other hand, a breakout from the channel would invalidate this short-term bearish ADA price analysis and take the price toward $0.425.
For BeInCrypto’s latest crypto market analysis, click here.
The post Cardano (ADA) Price Takes off as Launch of Stablecoin Nears appeared first on BeInCrypto.
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