Cardano has traded inside a descending channel for a month, with a lone breakout immediately rejected at $ 2.37 resistance. Currently challenging the midline of its pattern, ADA needed to tackle its 20-SMA (red) to record a new high at the upper trend line.
However, weak readings on the RSI and Awesome Oscillator positioned the ADA for another pitiful week of trading. That is, if the bears can constrain the price below the Fibonacci level of 78.6%. At the time of writing, the ADA was trading at $ 1.87, a 2.75% drop in the past 24 hours.
Cardano daily chart
Although ADA appears to have prevented a collapse of the descending channel, the price needed to overcome some major hurdles to touch another high on the upper trend line. First, ADA would need to post a daily close above the 200-SMA (green) and the golden 61.8% Fibonacci level. Once the 20-SMA (red) and 50-SMA (yellow) are broken by $ 2.0 and $ 2.08, respectively, ADA would look to record its next high around $ 2.15.
From there, the chances of a breakout above the 78.6% Fibonacci level would be quite slim if the indicators continue to trade in bearish positions. Even if a sudden wave of buying pressure triggers a breakout above $ 2.47, ADA would need its OBV to match early September levels to sustain higher levels.
The ADA daily RSI and MACD have been trading below their respective midlines for nearly two months. During this time, the OBV has also declined steadily as the volume of sales has exceeded the volume of purchases. Each of these indicators would need to rally above key levels for ADA to ignite a much-needed rally.
Now, a previous article suggested that the OBV broke its streak of lower lows. However, the index was still constrained by an upper sloping trend line posing as resistance.
ADA traders should say goodbye to a possible bullish trading week. If the bulls fail to break above their 20-SMA (red), another low can be expected at the lower trend line around $ 1.71. If the 50% Fibonacci level is lost due to bearish pressure, ADA would be exposed to a collapse. The $ 1.53 and $ 1.31 support areas would take center stage in such a situation.
This is a machine translation of our English version.