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Analysis

Cardano’s price to drop further with breach of descending triangle

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Source: Pixabay

Cardano had briefly shown signs of recovery from its previous fall in early-November. However, the coin could not keep up with the trend. The digital asset has been trading at a yearly low due to increased bearishness in the crypto-market. The coin has been treading close to its support and the chances of recovery are slim. ADA was valued at $0.0355 with a market cap of $929.73 million, at press time, with its 24-hour trading volume recorded at $78.36 million.

The short-term charts for the coin did not provide any sign of relief as it suggested the formation of a bearish pattern.

Source: ADA/USD on TradingView

Source: ADA/USD on TradingView

The hourly chart for Cardano witnessed a descending triangle taking shape. The pattern characterized by a sloping trend line marked the lower highs at $0.0376 and $0.0370, and a strong base at $0.0356. The price was seen consolidating within the triangle and on the breach, the price has been expected to face a further drop.

The 50-day Moving average crossed under the 100-day moving average and reflected the bearishness in the market. The 50-day MA has been under the 100 for the past 6 days, during which ADA lost 14.83% of its value.

Source: ADA/USD on TradingView

Source: ADA/USD on TradingView

The MACD indicator also reflected the bearishness setting in the market as the MACD line slid under the signal line. The Relative Strength Index [RSI] also highlighted increasing bearish momentum as the signal line moved closer to the oversold zone.

Conclusion

According to the short-term chart for ADA, a breach of the descending triangle could make the price of the digital asset plunge.

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Namrata is a full-time journalist at AMBCrypto covering the US and Indian market. A graduate in Mass communication, while majoring in Journalism, she writes mainly about regulations and its impact with a focus on technological advancements in the crypto space.

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