Key Takeaways:
- ADA price is approaching a crucial support at $0.400.
- It is facing a major bearish trend line with resistance near $0.555 on the weekly chart.
- A close below $0.400 could spark a sharp decline of over 50%.
Cardano’s ADA failed to gain pace above the $0.550 resistance. It is moving lower and approaching a significant support at $0.400.
Cardano (ADA) Price Reaches Key Juncture
In March, 2022, ADA formed a crucial top near the $1.244 level against the US Dollar. There was a steady decline below the $0.800 and $0.650 support levels.
It even settled well below the $1.00 level and the 50-week simple moving average (blue). The decline gained pace below the $0.600 level and the price tested a major support at $0.400. Recently, there was a bullish breakout above the $0.500 resistance.
Cardano’s weekly price chart | Source: ADAUSD on TradingView.com
However, the bears were active near the 23.6% Fib retracement level of the main decline from the $1.244 high to $0.402 low. There is also a major bearish trend line forming with resistance near $0.555 on the weekly chart.
The price topped near $0.600 and is currently moving lower. On the downside, ADA price might find strong bids near the $0.400 support zone.
A close below the $0.400 could trigger another sharp decline. In the stated case, the price might drop over 50% and even test the $0.200 support or $0.198. The next major support is near $0.180, below which the price may perhaps dive towards $0.150.
Conversely, the price might attempt another increase from the $0.400 support zone. An immediate resistance is near the $0.520 level. The first major resistance is near the trend line and $0.550. A clear move above the $0.550 resistance could spark a strong increase. The next major resistance is near $0.650.
Any more gains might open the doors for a move towards the $0.820 resistance zone. It is close to the 50% Fib retracement level of the main decline from the $1.244 high to $0.402 low.
Overall, the current structure is clearly bearish and ADA price is now approaching a crucial breakdown support at $0.400. If there is a clear move and close below $0.400, the price could drop 50%. Conversely, the bulls may perhaps attempt a fresh increase towards the $0.550 resistance or even $0.650 in the coming days.
