Charted: Cardano (ADA) Dives 20%, Why $0.70 Could Spark Fresh Increase
Cardano’s price traded to a new multi-month high at $0.9860 before correcting lower. ADA declined over 20%, but it is likely to remain well bid near the $0.7000 level.
- ADA started a strong surge and climbed above $0.9000 before correcting lower against the US dollar.
- The price is still trading well above $0.7000 and the 100 simple moving average (4-hours).
- There was a break below a major bullish trend line with support near $0.8800 on the 4-hours chart of the ADA/USD pair (data source from Bitfinex).
- The pair is likely to consolidate above $0.7000 before starting a fresh increase in the near term.
Cardano (ADA) is Correcting Gains
In the past few days, cardano’s price started a steady increase above the $0.7000 resistance. ADA price even cleared the $0.8000 resistance and settled well above the 100 simple moving average (4-hours).
Finally, there was a break above the $0.9000 level, but there was no test of the main $1.00 level. The price started a downside correction (similar to bitcoin) after setting a new multi-month high at $0.9860. There was a break below the $0.9000 and $0.8800 support levels.
There was also a break below a major bullish trend line with support near $0.8800 on the 4-hours chart of the ADA/USD pair. The pair even spiked below the $0.7200 support level, but it remained well bid above $0.7000.
It is now trading well above $0.7000 and the 100 simple moving average (4-hours). A low is formed near $0.6919 and the price is currently recovering. It climbed above the 23.6% Fib retracement level of the recent decline from the $0.9860 high to $0.6919 low.
Source: ADAUSD on TradingView.com
On the upside, there is a major resistance forming near the $0.8500 level. There is also a connecting bearish trend line near $0.8500 on the same chart. The trend line coincides with the 50% Fib retracement level of the recent decline from the $0.9860 high to $0.6919 low.
A successful break above the $0.8500 resistance and the trend line could start a fresh surge. The next key resistance sists at $0.9000.
If cardano’s price fails to clear the $0.8400 and $0.8500 resistance levels, it could correct lower. An initial support is near the $0.7200 level.
The main support is now forming near the $0.7000 level. A clear break below the $0.7000 support zone could push the price towards the 100 simple moving average (4-hours) at $0.6000.
4-hours MACD – The MACD for ADA/USD is gaining momentum in the bearish zone.
4-hours RSI (Relative Strength Index) – The RSI for ADA/USD is currently below the 50 level.
Major Support Levels – $0.7200, $0.7000 and $0.6000.
Major Resistance Levels – $0.8400, $0.8500 and $0.9000.