By Franklin Smith
Cardano witnessed an expected breakdown within the past few days after the altcoin struggled to overpower the shackles of its upward channel’s midline. The slump had ADA fixating its spot beneath the Exponential Moving Average ribbons, confirming broader bearish strength. The bulls might plan to extend the current squeeze before plausible breakdowns. While writing these lines, ADA traded at $0.4652.
Cardano Daily Timeframe
Cardano’s ADA breached the downward boundary of an upside channel after hovering at the pattern’s lower half for fourteen days. That saw the alternative token entering a bearish streak. Meanwhile, the breakdown overpowered the token’s squeeze period, confirming a bear superiority. The actions over the past few days displayed a bearish flag pattern on the daily chart.
Moreover, the reduced volume during the setup formation makes ADA more vulnerable to a possible breakdown. A substantial closing beneath $0.45 might see the alternative token retesting $0.41 – $0.43 in the upcoming sessions.
So, the coming few candles might affirm the possibilities of an extended downside. The bearish cross on the 20-50 Exponential Moving Average further supported the short-term bearish superiority. An ultimate closing beyond the 20EMA would suggest bearish invalidation.
Reasoning
The RSI (Relative Strength Index) persisted with its bearish bias after securing support around the 35 mark. Buyers should aim for a position beyond the midline to amplify comeback possibilities.
Also, the southbound MACD (Moving Average Convergence Divergence) lines dipped beneath zero after one month, revealing a massive selling edge. Moreover, the Volume Oscillator’s dip beneath the zero line displayed a bearish divergence with ADA price action.
Final Thought
Considering the bearish flag pattern emerging beneath the southbound Exponential Moving Average ribbons, sellers might plan to emanate pressure. Cardano buyers should trigger an uptick beyond the 20EMA to cancel this strength. Possible targets would stay as discussed. Nevertheless, investors should watch Bitcoin as its actions could impact the broad market.
The crypto market attempted an upside during this publication, presenting brief upswings over the past day. Bitcoin gained 0.20% within the previous 24 hours to change hands at $21,730.66.