In response to the consolidation phase in the market leaders Bitcoin and Ethereum, several cryptocurrencies have witnessed increased volatility since last week. As a result, the Cardano coin shows candles with long-wicks rejection on either side reflecting the uncertain behavior. However, a noteworthy pattern has emerged on the daily chart, characterized by a downward movement transitioning into a sideways trajectory. This particular price action formation resembles a bearish pennant pattern.
Also Read: Cardano Scaling Tool Hydra Welcomes Significant Update
Cardano Daily Chart: Key Points
- The ADA price resonating within a triangle structure can be considered a no-trading zone.
- A bullish breakout from the upper trendline of the pennant pattern could surge the altcoin price by 16%
- The intraday trading volume in the ADA coin is $234 Million, indicating a 22.3% gain
Source- Tradingview
Over the past eight days, the ADA price trading sides have been confined within two converging trendlines, which mirrors the prevailing market sentiment of uncertainty. A closer examination of the 4-hour chart reveals the emergence of a triangular shape, indicating the development of a pennant pattern.
Pennant patterns are often observed within downtrends and serve as brief interludes that allow for a temporary pause in the prevailing bearish momentum, thereby extending the preceding trend. As of the current observation, the Cardano coin is exchanging hands at $0.267, reflecting an intraday loss of 1.8%.
With a recent reversal from the pattern’s upper trendline, the price action is poised to challenge the lower support. In addition, a higher probability scenario involves Cardano’s price breaking below the lower trendline, an action that could potentially amplify the selling pressure.
Such a breakdown could trigger a subsequent decline of approximately 15%, pushing the price downward to revisit the low point recorded in June, at $0.22.
1 ADA to USD = $0.2601733 -1.3% (24h) Buy / Sell
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Can Cardano Coin Reclaim $0.3 Mark?
If the ADA price gives a bullish breakout from the triangle shape or rebounds from $0.22 support, the upward trajectory could still be limited to $0.3 as the buyers may face a downsloping resistance trendline around it. The daily chart shows two such resistance trendlines, which are offering strong resistance during bullish bounces. For potential investors to get a better confirmation for trend reversal, the coin price must break above these barriers.
- Average Directional Index: The rising ADX slope reflects the seller’s strength to prolong the correction trend
- Bollinger Band: The downsloping lower band of the Bollinger band indicator reflects the underlying selling momentum is still aggressive.