Will Cardano (ADA) bounce back as it hits the $0.73 support level for a falling wedge breakout rally?
As the crypto market stands on extremely volatile grounds, altcoins hang at crucial support levels. With the altcoin total market cap hanging at $1.22 trillion, Cardano is taking support near $0.73.
This support level has acted as a critical pivot in the past, making it a key area to watch for potential price action. With a minor slowdown in selling volume, is the ADA price ready for a breakout rally?
Cardano Analysis
In the daily chart, the ADA price trend reveals the downfall in Cardano, testing a crucial local support trendline. The declining trendline converges near the $0.73 support level.
With several lower price projections, the underlying support at a relatively lower level compared to the recent swing high suggests the potential for a reversal.
However, as buyers failed to sustain the momentum, ADA fell by 8.56% last night, creating another bearish engulfing candle. Thus, the pressure over the support trendline has significantly increased.
This signals growing uncertainty among traders, with bearish sentiment outweighing bullish attempts. If buyers step in, a strong reversal could quickly shift the momentum.
Furthermore, the downfall has stretched under the lower Bollinger Band, increasing the chances of a prolonged crash.
Cardano Whales Hesitate To Buyback
As Cardano stands at a crossroads, the altcoin fails to find support from whales. As reported yesterday, ADA Whales offloaded 330 million tokens during the market crash.
However, the whales have yet to buy back their tokens. This lack of whale accumulation adds to the bearish outlook, raising concerns about sustained buying pressure in the near term.
NVT Ratio Signals a Potential Bullish Reversal
ADA Price Targets
With a slight increase in the chances of a bullish reversal, Fibonacci levels point to a critical price level near $0.8567. This level marks the 23.6% Fibonacci retracement, which aligns with the local resistance trendline.
The trendline forms a falling wedge pattern with the support trendline, typically signaling a bullish breakout. Thus, a potential recovery could be underway as buyers gradually gain strength.
On the flip side, if ADA closes below $0.73, it will likely test the $0.60 support zone. A break below this level could trigger a sharp decline, signaling a deeper correction phase for ADA.
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