A bearish structure still has a grip on Cardano after the recent attempt to invalidate the pattern ended in a price rejection.
Cardano (ADA) could not overcome the selling pressure at the neckline resistance of a symmetrical triangle it once trended in. Following the rejection, it now faces renewed downward pressure targeting lower prices unless there is an immediate response.
Key Points
- A bearish structure still has a grip on Cardano after the recent attempt to invalidate the pattern ended in a price rejection.
- Cardano once trended within a symmetrical triangle on the 30-minute timeframe before bears dragged prices below the lower support trendline on Sunday.
- ADA recovered from the low following a broader crypto rebound, reaching a high of $0.358 yesterday.
- Again, this level proved too strong for the coin, forcing it lower and eventually out of the triangle.
- Cardano will only invalidate this bearish scenario if it reclaims the triangle and closes above the resistance trendline.
Cardano Breaks Down
Notably, Cardano once trended within a symmetrical triangle on the 30-minute timeframe. The structure kept its price in check from January 20 until bears dragged prices below the lower support trendline on Sunday. Following the breakdown, it fell to a low of $0.332, pushing prices below the yearly opening of $0.334.
However, ADA recovered from the low following a broader crypto rebound, reaching a high of $0.358 yesterday. An accompanying chart shows that this high closely aligns with the descending resistance trendline of the symmetrical triangle, which broke down a few days ago.
Again, this level proved too strong for the coin, forcing it lower and eventually out of the triangle. As a result, the recent bounce appeared corrective, as ADA simply retested the triangle before a bearish continuation.
What Does It Mean for ADA
The rejection yesterday and bearish continuation today suggest that Cardano is in a full downtrend. Supported by choppy broader market conditions, it could trade lower, with the first target a retest of its January 25 lows.
Subsequent higher-timeframe lows include the December floor at $0.329 and the October flash lows at $0.273. Notably, this remains speculative, and there is no guarantee of this.
However, ADA could still reverse its current course. All it needs to do to invalidate this bearish scenario is to reclaim the triangle and close above the resistance trendline. This depends largely on bullish ecosystem development and a broader market recovery.