Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
Cardano (ADA) has been in a prolonged downtrend since it reached its ATH on September 2. Meanwhile, it lost its vital $1.02 support as the bears projected their dominance.
Now, a convincing close below the $0.938 support would brace ADA for a $0.91 retest before entering a possible near-term recovery phase. Any reversal of either support would stall near the 20 EMA (red) resistance.
At the time of writing, ADA was trading at $0.932, down 4.65% in the past 24 hours.
ADA 4 Hour Chart
The latest bearish phase saw a bearish flag on the 4-hour chart after the up-channel alt consolidated from its nine-month low on January 22. During this phase, ADA tested the USD 1.2 resistance and formed a head-and-shoulder (bearish) pattern. As a result, it broke out of the channel to test its six-month Point of Control (red) near the $1 zone.
However, the February 17 sell-off fueled pre-existing bearish tendencies as losses of 13.3% were recorded in the past three days. For example, its price action saw multiple bearish engulfed candlesticks and dropped below its 20-50 EMA. The alt still had no chance of recovery as the price traded near the lower band of the Bollinger Bands (BB).
As of now, the bulls will need exceptional thrust to regain the $1.02 value they have held for almost a year. As the gap between the 20 EMA and the 50 EMA widens, a retest to its immediate support would likely be before a potentially tight recovery phase.
To pave a path to the $0.98 level, buyers still need to ramp up trading/money volumes.
The RSI was heading south at press time as it breached vital levels to reaffirm bearish strength. Sustained trajectory could reverse the 25-point support and open ways for a near-term recovery. As the gap between the +DI and -DI shows a huge disparity, the chances of a recovery in the near term would only increase.
While the trend is still a long way off, oversold values on the Bollinger Bands and technical indicators keep hopes of a near-term recovery alive. Taking into account the current movement, a retest towards $0.91 before a recovery should come as no surprise.
Additionally, investors/traders should watch out for Bitcoin’s movement as ADA shares a 57% 30-day correlation with the king coin.
This post Will there be any surprises for Cardano’s near-term recovery?
was published first on https://ambcrypto.com/will-there-be-any-surprises-for-cardanos-near-term-recovery/