Cardano (ADA) did not manage to break above a long-term descending resistance level and saw a sharp dip after its rejection. Technical indicators seem to suggest that the price is prone to continue its downward move.
At the press time, ADA is changing hands around the $0.09 and $0.10 zone, which is expected to be the crypto coin’s support area. The same spot served as resistance throughout the Mat 2019 upward activity before ADA finally managed to break out above it in July 2020.
ADA’s Long-Term Bounce
Initially, ADA fell below the mentioned level, but a bullish hammer candle appeared during the week of September 21st to 28th. This is a steady bullish sign, more so if the price stays above the $0.09 support line.
If it does, a rally could push the price up to $0.155, while a breakdown support would probably cause a drop to $0.07. Technical indicators are now at a do-or-die level, the RSI is at the 50 line, and the Stochastic Oscillator is on the way to make a bearish cross.
Couldn’t Break Out
The ADA price has been dropping alongside a descending resistance level since July 2017 when it got to $0.155. The dip continued until the price reached a low of $0.074 on September 23rd. Then, the coin began to move upwards, following an ascending support line.
ADA chart. [Image Source: TradingView]
The price reached a critical level on October 27th that was the point of overlap between the descending resistance level drawn from the July highs, the ascending support line coming from the September lows, and the 0.5 Fibonacci level of the whole decrease.
ADA price did not manage to go further and broke down from the ascending support. The technical indicators in the daily timeframe are bearish, and the MACD and RSI are decreasing. The RSI has dipped below the 50 line, and the Stochastic Oscillator has made a bearish cross. All these signs are indicating that the price is expected to continue dropping.
Cryptocurrency trader @po1szn emphasized an ADA chart that depicts a long-term wave count, which foresees that the coin will drop to $0.05 before it bounces up at a rapid pace. Although we cannot yet predict the latter move, it appears like ADA will go down towards the $0.07 support line.