Cardano (ADA) Shows Continued Signs of Weakness Despite Bullish Fractal
Cardano (ADA) has been one of the strongest major cryptocurrencies throughout the past year.
The token has been posting consistent gains since the start of the year, which has been driven by massive inflows of new investors as well as some positive fundamental developments.
One such development would be the recent Shelley mainnet upgrade, which has long been anticipated by investors. The successful implementation of this upgrade is expected to bring ADA’s usage and utility to the next level.
Despite this strength, it has been facing some short-term technical weakness alongside Bitcoin and virtually all other major digital assets.
After rallying to highs of nearly $0.15 on Saturday, Cardano faced a harsh selloff that caused its price to slide down to $0.13.
It has formed a strong base at this price region, but analysts are now foreseeing further near-term downside.
This weakness may even be enough to invalidate a fractal pattern that has been working in the crypto’s favor throughout the past few days.
Cardano Flashes Signs of Weakness Despite Emergence of Bullish Fractal Pattern
At the time of writing, Cardano is trading up just over 3% at its current price of $0.138. This marks a slight rise from its recent lows of $0.13 that have been visited on multiple occasions throughout the past few days.
Since dropping on Saturday, ADA has posted three clearly defined bounces at this price level. This has put in play a potential “triple bottom” pattern that may bolster its short-term outlook.
So far, this pattern has provided Cardano with some slight strength, but where it trends next may depend largely on whether or not Bitcoin can continue pushing higher after dropping to $11,000.
One analyst did point to the existence of a bullish fractal pattern, noting that the striking similarities between its current price action and that seen in early-July suggest that upside could be imminent.
“ADA (USDT) 4 hour – Fractal suggests bullish continuation…” he noted.
Image Courtesy of Cheds. Chart via TradingView.
Why One Analyst Thinks ADA is About to See Some Major Downside
Despite the aforementioned factors both playing into Cardano’s favor, one analyst recently explained that he still expects the cryptocurrency to see further weakness.
He notes that its strong outperformance of the aggregated market will likely make it prone to seeing more exaggerated downside movements whenever the market-wide trend weakens.
“ADA by far one of the weakest performers of the last couple of days. Not liking where the consolidation is hanging right now. We can expect some weakness given it has outperformed nearly everything else since the lows. Approach is still the same,” he said.
Image Courtesy of Cold Blooded Shiller. Chart via TradingView.
If Bitcoin continues higher in the near-term, however, there’s a strong likelihood that Cardano will continue outperforming it.
Featured image from Unsplash. Charts from TradingView.