Cardano (ADA) is showing signs of a potential recovery after a recent dip, with the formation of a morning star pattern suggesting that the price could bounce back to $0.73. Despite ongoing uncertainty in the broader crypto market, Cardano has been holding steady, trading at $0.6724 after a recent drop from $0.6296.
The developing morning star pattern on Cardano’s price chart has increased optimism among traders, with some analysts predicting a retest of the $0.73 resistance level, and possibly even a breakout towards $0.92. But is this the beginning of a new bullish rally or just another temporary recovery?
On the daily chart, Cardano’s price trend recently struggled to break through the 200-day Exponential Moving Average (EMA), leading to a decline of around 10% over the weekend. The downturn was followed by three consecutive bearish candles, signaling some weakness in the market. However, things took a positive turn when a Doji candle formed, indicating a slowdown in the downtrend and suggesting that the price might be ready for a bounce from the $0.60 support level. This price point coincides with the 50% Fibonacci retracement, further validating the support area.
The formation of a bullish candle on the chart, followed by a potential morning star pattern, indicates that the market sentiment may be shifting. If Cardano can maintain this bullish momentum, it could test the key resistance at the 61.80% Fibonacci level, which sits around $0.73. Additionally, the 200-day EMA line is also approaching this resistance, adding further importance to this level.
At present, Cardano is facing a significant resistance near the $0.73 level, which could act as a key pivot point for future price action. If the price successfully breaks through this resistance, the next target for ADA could be the 78.60% Fibonacci level, potentially pushing the price towards $0.92. However, if Cardano fails to hold the current support at $0.60, the next key support zone is at the 50% Fibonacci retracement level around $0.53, which would represent a downside risk of nearly 20%.
The 50-day and 200-day EMA lines are also nearing a potential “death crossover,” which could signal a bearish trend if the price fails to reclaim the $0.73 resistance soon. If the market sees a sustained decline, Cardano could be at risk of testing lower price levels, including the $0.31 to $0.24 range.
Crypto analyst Ali Martinez has raised concerns about the potential for a major downside risk if Cardano fails to reclaim the critical support level between $0.70 and $0.80. If this level is not regained, the price could continue its downward trend, possibly reaching as low as $0.31 to $0.24. This highlights the importance of maintaining support above the $0.60 mark to avoid further declines.
However, the recent price action and the development of a potential morning star pattern suggest that there is still hope for a recovery in the near term. If Cardano can sustain the bullish momentum, it could retest key resistance levels and potentially break out toward $0.92.
Cardano’s recent price action and the formation of a morning star pattern indicate that a bullish reversal might be in the cards. The next few days will be crucial for ADA, as it faces a key resistance at $0.73. A successful breakout could trigger a rally toward $0.92, while failure to hold support could lead to a significant downside risk. Investors and traders will need to closely monitor these key levels to gauge Cardano’s next move in the market.
A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5
Get the latest Crypto & Blockchain News in your inbox.
Join Now