Cardano set to breach falling wedge pattern, pushing price upward

The altcoin touched its six-month low in the first week of October plunging its prices to $0.0378. At press time ADA was trading at $0.0407, registering a fall of 1.05% on the 24-hour price chart.

Although Cardano’s price has been declining since 9th October, key indicators suggested that it might be preparing for a short term bullish price action.

1-Hour Price Chart

Source: ADA/USD on TradingView

On the 1-hour price chart, Cardano formed a falling wedge pattern characterized by two converging lines with lower highs at $0.0429, $0.0421, and $0.0409. The lower lows met the falling wedge at $0.0411, $0.0407 and $0.0400. A falling wedge pattern formation is considered bullish as it is often followed by a bullish breakout. The breakout might happen around mid-October and the price might breach the resistance of $0.0420.

The price was trying to move over the ema-ribbon to gain bullish momentum. The ema ribbon suggested increased volatility which was possible because of the sudden rise in prices on 11th October.

Source: ADA/USD on TradingView

MACD indicated a bullish movement, however, MACD line may be in for a bearish crossover which might amount to a fake breakout observed on 11th October, given the pattern formation was bullish and so were the other indicators.

Conclusion

Cardano looked to breach the falling wedge pattern towards mid-October, and it is a bullish sign as a falling wedge pattern is often followed by a bullish breakout. MACD line and ema ribbon suggested that the market looked bullish in the short term. Thus, Cardano looked bullish in the short term.