Disclaimer: The findings of the following analysis are split into two. While the findings of the first half are long-term in nature and can be foreseen to take place over the course of the next week, the other findings can be expected to take shape in the next day or two
Cardano’s movement since the March dump has been explosive, with the coin surging by a whopping 449% from its lowest point to its highest point on the charts. Not only did ADA rush past its pre-March levels, but it also attempted to breach the highs last managed back in March 2019.
Cardano, ranked as the market’s 11th largest cryptocurrency, had a market cap of $2.15 billion, at the time of writing. However, while the token, at press time, was trading at $0.0833, its bubble needs to burst. This is especially likely since the crypto’s daily time frame shows the formation of a bearish pattern on the charts.
Cardano one-day chart
Source: ADAUSD on TradingView
From the above, the uptrend Cardano has been on is clearly visible. However, as the crypto’s price nears the end of a pattern, a breakout is required. As previously mentioned, the breakout from the ascending channel is bearish, which means the price will drop to 50 DMA [yellow] at $0.072, a 12.59% drop.
In an extremely bearish scenario, there is a chance of the price dropping down to the 200 DMA at $0.0506, which is a 40% drop from the price level, at the time of writing. These targets are medium-to-long-term targets and they will be achieved in time, at least the 1st target.
Cardano four-hour chart
Source: ADAUSD on TradingView
Even on the four-hour time frame, ADA exhibited bearishness with the formation of a descending triangle. The descending triangle showed the consolidation of price with lower highs but above the support, which formed the base of the triangle.
At press time, a few more bounces could be expected before the price finally breaks out of the pattern. The Relative Strength Index showed a similar sentiment, with the same leaning towards the overbought zone on the charts; meaning, the price might surge a little before it heads towards the base of the triangle, which is a 10% drop.
Assuming the situation is still bearish at the time of breakout, the likely target for ADA is $0.0656, which is another 10% drop from the base of the triangle. Hence, the overall outlook for ADA is bearish, both in the short and the long-term.
