Cardano is forming a potential morning star pattern, increasing the chances of a bounce back to $0.73. Is this the start of a new bullish rally?
While the crypto market remains uncertain, Cardano is holding steady at $0.60. After recently dipping from $0.6296, Cardano is now trading at $0.6724.
The formation of a potential morning star pattern and an intraday recovery suggest that Cardano may retest the $0.73 resistance level. Could this lead to a breakout toward the $0.92 mark?
Cardano Price Analysis: Teasing a Bounce Back to $0.73
On the daily chart, Cardano’s price trend recently failed to overcome the 200-day EMA, leading to three consecutive bearish candles and a 10% decline over the past weekend.
However, the downturn took a quick bullish turn as a Doji candle formed, signaling lower price reactions from the $0.60 mark. This level coincides with the 50% Fibonacci retracement, highlighting a key support area for Cardano.
Currently, Cardano is extending the bullish turnaround with an intraday recovery, forming a bullish candle and indicating the potential formation of a morning star pattern. With this sudden reversal, Cardano will likely retest the short-term crucial resistance at the 61.80% Fibonacci level.
Additionally, the 200-day EMA line is moving closer to the resistance level. Amid the recent surge in bearish sentiment, the 50- and 200-day EMA lines are on the verge of a “death crossover,” which could trigger a major sell signal for Cardano.
Moreover, the MACD and signal lines have recently shown a negative crossover during the weekend’s pullback.
Analyst Warns of Major Downside Risk
Ali Martinez, a crypto analyst, highlights the recent pullback in Cardano as a potential precursor to a major breakdown. He points to the critical support zone between $0.70 and $0.80 as key.
With the recent breakdown, Martinez warns of a significant downside risk if Cardano fails to reclaim the support level soon. Based on previous declines from this crucial support area, the correction could extend to the $0.31 to $0.24 range.
Cardano Price Targets
Based on the recent price action, the lower price rejection suggests a potential retest of the 61.80% Fibonacci level at $0.73. This implies an upside potential of 8.52%.
Optimistically, a breakout could push the price toward the 78.60% Fibonacci level, with the next target at $0.93.
On the flip side, a close below the 50% level could test the local support trendline near $0.53, representing a potential downside risk of nearly 20%.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
