Cardano eyes 10-15% decline as ADA fails to break multi-month trendline resistance

cardano, Cardano eyes 10-15% decline as ADA fails to break multi-month trendline resistance
Image by Michael Russell from Pixabay 
  • Upsides look limited for Cardano’s ADA.
  • The coin is trading within a descending triangle formation and risks correcting by 10 – 15%.

Jaipur (CoinChapter.com) — Ever since the tide turned against ADA bulls after the crypto correction last month, upsides have been limited for Cardano’s native cryptocurrency token.

Cardano faces tough resistance

The ADA/USD pair has printed a series of lower highs for almost one and a half months. The coin has stayed firm above the multi-month $1 support. But an absence of significant buying pressure has kept it restricted within a descending triangle setup.

cardano, Cardano eyes 10-15% decline as ADA fails to break multi-month trendline resistance
Upsides Remain Limited For ADA/USD, Source: ADAUSD on TradingView.com

Buyers attempted a recovery after the recent price retracement on June 21. However, the momentum wasn’t enough for a full-blown breakout. All cryptocurrencies slipped down in unison, so this is nothing less than a snowball effect. ADA holds an 82% correlation with Bitcoin and copies almost all price moves of the benchmark cryptocurrency.

Due to the failure to surmount the multi-month trendline resistance, the token that underpins Cardano’s smart contract platform risks dropping significantly.

Also Read: Cardano’s ADA risks losing half its value if it breaks this support range

Decline Upto 15%

It’s not just about breaking past the descending triangle formation.

ADA/USD’s restricted trend beneath the 20-day exponential moving average (EMA) wave since the last 20 days also confirms that a dip is near. In the given scenario, the trading pair stands to retest the local support at $1.15, which acted as a launchpad for the recent recovery attempt. This would be a near 15% correction from the $1.35 top, flipped to resistance by bears.

Also Read: Cardano confers BTFD opportunity as ADA eyes 15% price crash

Any more selling pressure beyond that could result in the 5th largest crypto dropping all the way down to $1. The multi-month support also corresponds with the crucial 200-day moving average (MA) wave.

However, if the ADA/USD pair can maintain its strength above $1, bulls can still keep their hopes alive. The current bearish MACD (Moving Average Convergence Divergence) cycle seems on the verge of closing out. Intraday/swing traders could use this as an opportunity to prop prices back above the 20 EMA wave ($1.42).

For now, a decline is very much on the cards. Since the MACD bullish cycle on the 4-hour chart is nearing its end. Therefore, it’s recommended to either book profits or follow a wait-and-see approach to entering new buying positions.

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cardano, Cardano eyes 10-15% decline as ADA fails to break multi-month trendline resistance

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