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Cardano price action has continued to stand below $1 due to corrections in the last seven days. This correction, played out across the crypto industry, saw Cardano break below the $1 mark and in December 18%.
Although the general trend suggests a possible movements during the week to an all-time high (ATH), the latest technical analysis on TradingView opened the possibility of further correction at $0.43 before another strong move up.
Current Price Movement Highlights Resistance and Cooling Period
According to technical analysis of Cardano (ADA) price action. in the weekly candle time period, the cryptocurrency encountered significant resistance around the $1.2046 mark. This resistance came from behind Cardano’s staggering 205% surge. from $0.4322 at the end of October to $1.32 at the end of November.
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Interestingly, this significant price increase has seen Cardano make significant declines that act as support levels for the price. Furthermore, the rally ended with Cardano entering overbought territory on the Relative Strength Index (RSI). The rally culminated in Cardano’s price peaking at 82.87 on the RSI, but has since returned to a cooling / correction period where buying pressure is gathering at the time of writing.
Cardano’s consolidation has opened up speculation about its next direction, with a large volume of purchases seen in recent trading sessions.
Deep Correction Could Test Key Support at $0.43
While the long-term outlook remains bullish, the analysis highlights a deep correction scenario that could send Cardano’s price falling further in the short term. With this in mind, the analyst points to support levels the ADA could revisit in the event of a serious overhaul. The first key level at $0.7683 has already proven its worth, serving as a reaction point to recent price moves.
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Below this, $0.4322 represents the final support for the current bullish leg. What this means is that ADA must hold above the $0.43 support level for the bullish trajectory to remain active. Failure to hold above $0.43 is likely to result in further price declines at this point and a change to the bearish outlook.
The analyst also points to $0.3166 and $0.2427 as key supports. These levels are Cardano’s lowest support levels during the previous bear market and are considered unlikely to be broken in the event of a long-term decline.
Despite the power of deep fixes, Cardano’s recent market behavior and buying trends raise a a promising long-term view. At the time of writing, ADA is trading at $0.912 and is up 2% in the last 24 hours. If the current resistance at $1.2046 is cleared, ADA is in a good position to challenge its $3.09 high and possibly establish a new high in the current cycle.
The featured image was created with Dall.E, a chart from Tradingview.com
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