Over the last five weeks, the Cardano coin price turned down twice from near the $0.42 resistance zone. These two rejection indicates the sellers continue to defend this level and encourage further downfall. Moreover, the daily chart revealed the formation of a famous bearish pattern called double top which also offers entry opportunities to interested short sellers.

Key Points: 

In theory, the double top pattern is formed when the asset’s bull run reached a peak and is unable to carry further growth
A bearish breakdown from the $0.355 could set the ADA price for an 18% drop
The intraday trading volume in the ADA coin is $345.5 Million, indicating a 13% loss.

Source- Tradingview

On February 16th, the Cardano coin showcased a sharp reversal from the $0.42 resistance. This resulting downfall tumbled the prices by 13% where it currently trades at the $0.36 mark. However, this price drop is part of a bearish reversal pattern called a double top pattern.

This pattern is visible when the asset price turndown from a fixed horizontal resistance twice forms an ‘M’ shape structure. Thus with sustained selling, the ADA price may drop another 3% and retest the $0.355 support.

Under the influence of the bearish pattern, the coin price is likely to break the $0.355 support. A daily candle closing below the $0.355 support will accelerate the selling pressure and signal the upcoming correction phase.

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In an ideal case, the post-breakdown fall could plummet the prices by 18% down to hit the $3 psychological support.

On a contrary note, if the ADA price shows sustainability above the $0.355 support, the price trend may turn sideways and consolidate in the short range.

Technical Indicator. 

Relative Strength Index: the falling RSI slope nosedived below the midline(50%) indicates increasing negative sentiment around the Cardano coin.

Bollinger band: the coin price breaks below the indicator midline project the sellers are currently controlling price movement.

Cardano Coin Price Intraday Levels

Spot price: $0.36
Trend: Bearish
Volatility: Low
Resistance level- $0.42 and $0.48
Support level- $0.35 and $0.325

The post Bearish Pattern Puts Cardano Coin At A Risk Of Longer Correction appeared first on CoinGape.

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Filed under: News - @ February 24, 2023 8:21 pm