Cardano (ADA) has had a tough last few weeks as its value has dropped by roughly 25% from its main support. Bitcoin dropped to the $31,000 support level. As a result, the majority of the cryptocurrency market has also fallen.
Therefore, the price movements experienced in Cardano were not considered unusual. The price has remained in a downtrend for about 3 months as the bears remain in control. However, there are some signs that there may be a trend change in the process.
Cardano has been forming a falling wedge shape for the past 3 months. This pattern is similar to the one seen in Bitcoin and is usually a bullish pattern. In the short term, the bulls need to break and hold the main $1.20-1.27 resistance area for a chance to bounce back.
If Cardano manages to break this mark and hold on, we can say that the price has exited the ascending wedge pattern. This will likely cause a major resistance at the $1.34 level.
Cardano price analysis: 1-day live chart
If Cardano turns bullish in the short term, it will need to tackle the 30-day MA. This MA has been the element that regulates the price since the beginning of June. If the bulls fail, the price will likely return to its main zone of $1.20-1.27 USD. If that also fails, ADA can be expected to bounce back to the $1.20, $1.14 and $1.09 support respectively.
Looking at the RSI, it can be seen that the strength has been basically flat for months. This in turn created a descending channel-like structure that needed a strong breakout on either side to have a confirmed trend change. The Stochastic RSI is stuck in the oversold zone, a sign that a reset is about to happen, which may have set the stage for another bullish pressure.