The Cardano (ADA) price is trading slightly above diagonal and horizontal support after failing to sustain its increase due to a previous breakout. Whether the price bounces or breaks down could be the catalyst that determines the future trend’s direction.

Daily Time Frame Technical Analysis

The daily time frame technical analysis shows that the ADA price outlook is positive for several reasons.

• First, ADA recently broke out of a short-term descending resistance line that had been present since April 13. This breakout serves as a strong and clear bullish signal. It means that the bearish trend is over, and a new bullish trend has begun.
• Second, the price successfully reclaimed the $0.30 area, which is now expected to act as support. Even though the price has not bounced, transaction volume reached a 3-month peak as bulls defended the area.

Following the breakout, the price temporarily dropped but found support at both the previously mentioned resistance line and the $0.30 area before rebounding. If the bounce continues, the next resistance will be at $0.36, a 15% increase from the current price.

Relative Strength Index (RSI)

Additionally, the daily Relative Strength Index (RSI) gives a bullish reading. Traders utilize the RSI as a momentum indicator to assess whether a market is overbought or oversold and to determine whether to accumulate or sell an asset.

If the RSI reading is above 50 and the trend is upward, bulls still have an advantage, but if the reading is below 50, the opposite is true. The indicator is currently above 50 and trending upwards, suggesting a bullish momentum.

Short-Term Time Frame Technical Analysis

A look at the shorter-term six-hour time frame gives a more undetermined reading.

• First, the wave count shows a completed A-B-C corrective structure. Since the correction is facing upward, the trend is likely bearish. Technical analysts employ the Elliott Wave theory as a means to identify recurring long-term price patterns and investor psychology, which helps them determine the direction of a trend.
• If this is true, the ADA price will break down from the short-term ascending support line and decrease to $0.25. This is a drop of 18%, measuring from the current price.

RSI on the Six-Hour Chart

However, the six-hour RSI is undetermined, failing to confirm if the ADA price will break out or down. The indicator is moving above and below 50, indicating an undetermined trend.

Conclusion

The Cardano price prediction will determine whether ADA bounces at the short-term ascending support line or closes below it. In case of a bounce, an increase to at least $0.36 will occur. However, a breakdown could lead to a drop to $0.25.

Overall, the ADA price outlook is positive, but the short-term trend is undetermined. Traders should wait for the price to make a decisive move before entering a trade.

Here are some additional factors that could influence the ADA price in the near future:

• The release of the Vasil hard fork, which is scheduled for June 2023. This hard fork is expected to improve the scalability and performance of the Cardano network, which could lead to an increase in demand for ADA.
• The overall performance of the cryptocurrency market. If the cryptocurrency market as a whole sees an uptrend, ADA is likely to follow suit.
• Any major news events that could affect the price of ADA, such as partnerships, regulatory announcements, or technical developments.

It is important to note that technical analysis is only one tool that can be used to analyze the price of ADA. Other factors, such as those listed above, should also be considered before making any investment decisions.

Overall, the ADA price outlook is positive. However, there are some risks that investors should be aware of before making any investment decisions.