Although some candle wicks rose above the $ 3 mark, Cardano had not yet posted a daily close above $ 2.96. In fact, the world’s third-largest digital asset was now taking shape within a falling wedge and the same was expected to severely affect ADA’s upward trajectory.
Bearish signs settled on some of its indicators and buyers needed to target a key price level to avoid a bearish result. At the time of writing, ADA was trading at $ 2.94, down 1.3% in the past 24 hours.
Cardano 12-hour chart
The 12-hour chart indicated that prices have moved within a declining wedge since August 23. The setup is generally considered bearish and it was expected to work as a reversal of the previous ADA uptrend.
A breakdown would set price targets of around $ 2.25, resulting in a 23% drop in value from the ADA release time level. An early cut at $ 2.46 can also be expected, which has now functioned as support.
On the other hand, the support found at $ 2.90 would allow ADA to continue the movement within the pattern, but a collapse was expected anyway. To negate this bearish structure, ADA would need to close above $ 3.1 with strong volumes.
This result would allow the ADA to prevail at higher levels without fears of an immediate pullback. A broader market rally would also have a positive impact on the ADA market.
Several divergences were detected between the ADA indicators. The Awesome Oscillator formed three lower peaks as buying pressure weakened. The index was also in danger of a sharp decline below the midline due to a bearish double spike setup. The MACD was also in constant decline since August 23.
The signal line stayed above the fast moving line, something that is normally seen when bearish momentum starts to build. Meanwhile, the RSI was a bit of a savior. The index stabilized from overbought levels a week ago and traded in a horizontal channel above 50. The ADA general uptrend would not be in immediate danger until the RSI dips below 40.
ADA’s falling wedge exposed the market to a 23% drop. Some indicators fell from multi-month highs and showed bearish signals. However, an RSI reading above 55 meant that a prolonged selloff was unlikely due to the presence of an underlying bullish force in the market.
This is a machine translation of our English version.
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