Cardano (ADA): $1.2 Fallout Risks a Downward Retest of $1 Again
Cardano (ADA) has its overall trend suggesting bearishness. Meanwhile, buyers rebounded ADA from the $1 level, leading to a 13% uptick over the past six days. Nevertheless, the alt could not sustain the breakout past $1.2, leading to a bull trap that suggests a potential plunge towards the support at $1. Nevertheless, buyers defending the lower support will reveal dip-buying actions.
ADA Technical Points
- ADA has its actions resonating within a climbing channel.
- ADA/USD is encountering massive resistance neat the 50-Simple Moving Average line.
- Cardano’s intraday trading volume stands at $2.39 billion, reflating a 41% upsurge.
Cardano (ADA) wobbled within a constricted range extending between $1 and $1.125 within the previous two weeks. However, buyers triggered a significant breakout on 4 February, overcoming the overhead hurdle to catalyze recovery rallies.
Sustained buying actions took ADA towards the closest resistance of $1.2, contemplating another breakout. Nevertheless, sellers imposed a massive resistance near this zone, rejecting the upside with a long candlestick.
The downward-sloping 50- and 100-day Simple Moving Average shows bears’ dominance. Furthermore, these EMA lines appear to reject downtrend rallies. Meanwhile, the Stochastic Relative Strength Index displays a bearish cross of the D and K lines, confirming a sell signal.
An Upside Channel Develops From $1 Support
The 4hr price chart shows ADA offered a breakout and candlestick closing beyond the resistance of $1.2. Meanwhile, the crypto was under a retest phase, searching for adequate demand. Nevertheless, the alternative coin encountered a fallout after buyers failed to maintain this zone.
This bull trap might see the alt plummeting back towards the $1 level, and further drops might lead to extended downtrends. The price chart reveals a climbing channel formation that might offer ADA mid-way support.
For now, investors can expect a slight upward correction and a potential downtrend before Cardano establishes a directional bias. Nevertheless, analysts believe ADA will see uptrends soon, and the hourly and daily chart reveals bullish actions. Broad market support is vital for Cardano’s upcoming bias.
Resistance zones – $1.2 and $1.4
Support zones – $1.12, then $1