The Cardano (ADA) price has been decreasing since July 27, possibly indicating that it has begun a corrective movement.
While a short-term upward retracement could occur, the ADA price is expected to eventually make another lower-low.
ADA Evening Star Pattern
The ADA price has been decreasing since it reached a high of 1,593 satoshis on July 26. In the period from July 25-27, the price completed an evening star candlestick pattern, which is considered a bearish reversal pattern. The price has been decreasing since.
Currently, the price is trading inside a minor support level at 1,145 satoshis. The support is created by the 0.382 Fib of the entire upward move and the 50-day moving average (MA), which has previously made a bullish cross with the 200-day MA.
While this area could be the initiator of a minor bounce, the likely level for the correction to end would be near the 0.618 Fib level at 870 satoshis, also supported by the 200-day MA.
A closer look at the evening star shows that it was combined with a considerable bearish divergence in both the RSI and the MACD.
While the latter has since turned bearish, it has made an attempt at a reversal, as evidenced by the lower momentum bar during the decrease. This supports the possibility of a minor corrective upward movement transpiring before the correction is completed.
The lack of any bullish divergence and the fact that the price is at a minor support level, however, makes it likely that the correction is not yet complete.
Cryptocurrency trader @Altcoinsherpa outlined an ADA chart, stating that:
Indeed, a decrease below this level could trigger a rapid downward movement towards the 0.618 Fib level outlined at the beginning of the analysis.
However, the price has created a short-term bullish hammer and is currently attempting to reclaim the previous support level at 1,170 satoshis. If successful in doing so, it could initiate an upward movement towards 1,400 satoshis.
It should be noted that there are no definitive signs of a bullish reversal yet.
The ADA/USD pair is trading inside a minor support area above $0.12. The price movement since March resembles a five-wave formation, which might have ended with a high of $0.1694 on July 27. The high was combined with a bearish divergence in both the RSI and MACD.
If the price is indeed correcting from a five-wave impulsive move, it could correct all the way back to $0.08. However, similar to the ADA/BTC pair, a short-term upward move is likely to transpire first.
A breakout above $0.1694 would mean that the fifth wave has extended and the price could make a new high near $0.20.
The post Cardano (ADA) Holds On to Crucial Support By a Thread appeared first on BeInCrypto.
Source: Be In Crypto