Cardano (ADA) faces another potential decline before its recent price recovery qualifies as a true bullish reversal, according to analyst More Crypto Online.
In a video shared on X, the analyst explained that ADA’s decline from its December high remains a concern. Despite recovering from its June low, the rebound lacks sufficient strength to confirm the start of a bullish cycle.
On the four-day ADA/USD chart, the price is trading within an upward channel. ADA was trading around $0.25, with $0.315 and $0.405 standing out as key resistance levels for the ongoing recovery.
ADA Faces Another Drop Before Recovering
Analyst More Crypto Online said Cardano (ADA) is moving within an upward price channel, but its choppy price action points to a temporary recovery. According to the analyst, ADA remains in a corrective phase, with another low ahead before a sustained recovery takes shape.
However, he also outlined an alternative scenario in which ADA has completed its first five-wave upward move and resumes its advance after a short-term pullback. Although the price action resembles a five-wave rally, the analyst said the move lacks the strength needed to confirm a lasting bullish reversal.
The next pullback will be critical in determining whether buyers retain enough momentum to push ADA higher or whether another decline lies ahead.
$0.315 and $0.405 Are Key ADA Price Levels
The YouTuber identified $0.23, $0.315, and $0.405 as important price levels for Cardano. Notably, the $0.315 level stands out because it aligns with a key Fibonacci level and previous price highs. A breakout above this resistance would strengthen ADA’s bullish outlook.
Accordingly, if the rally gains momentum, the next major target sits at $0.405. Reaching this level requires ADA to overcome intermediate resistance zones first. A longer-term downward trendline also remains a major obstacle to the recovery, adding another barrier for buyers.
Cardano Must Hold the $0.16–$0.215 Support Zone
Meanwhile, the analyst said ADA price needs to hold the $0.16–$0.215 support zone to preserve its recovery outlook. In the next pullback, ADA could retest this zone. A brief move below the rising channel would not invalidate the recovery, as long as key support levels remain intact.
The analyst highlighted $0.16 as the most important level for buyers to defend. A breakdown below this threshold would significantly weaken the bullish outlook.
Essentially, ADA’s next move hinges on the strength of its support zone and the market’s response to the coming pullback. The price action will determine whether the current recovery develops into a sustained uptrend or gives way to another decline.
At press time, ADA is trading at $0.2524, up 21% over the past 30 days despite the recent retracement.