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  • Cardano upside stalls short of $0.28 after an 82% upswing since January 1.
  • A sell signal on the 4-hour hints at an imminent breakdown, perhaps to $0.20.

Cardano has been on a massive upswing since the beginning of the year. In less than seven days, the staking token has grown by more than 82% to exchange hands at the new yearly highs of around $0.2750. However, it seems that a reversal may come into the picture in the coming sessions, perhaps erase some of the gains made.

Cardano’s 24% upswing could be in jeopardy

ADA is doddering at $0.265 at the time of writing. Over the last 24 hours, the smart contract token has accrued more than 24% in gains and bagged nearly 44% in the past seven days. The sevenths largest cryptocurrency must close the day above $0.26 and preferably overcome the hurdle at $0.28 to sustain the uptrend towards $0.30.

On the downside, losses will come into the picture if Cardano makes a daily close under $0.26. Besides, the Relative Strength Index shows that ADA/USD is in oversold conditions. Therefore, buying volume is most likely to decrease as the seller grip strengthens. A rejection from the current price levels will seek support at $0.20, $0.18, and $0.14, in that order.

ADA/USD daily chart

ADA/USD daily chart

 The TD Sequential indicator has presented a sell signal on the 4-hour chart in the form of a green nine candlestick. The pessimistic outlook suggests a correction in one to four daily candlesticks. A red two candlestick trading below a preceding red one candle could serve as confirmation that Cardano is poised to drop further.

ADA/USD 4-hour chart

ADA/USD 4-hour chart

The bearish narrative is likely to be confirmed if Cardano fails to break through the immediate resistance running from $0.259 – $0.266, as shown by IntoTheBlock’s IOMAP model. Here, 502 addresses had previously bought roughly 17 million ADA. 

ADA IOMAP chart

Cardano IOMAP chart

On the downside, the most robust support is highlighted between $0.228 and $0.0.236. Approximately 1,300 addresses had previously bought nearly 16 million ADA in the range. Upward correction is unlikely to continue. Hence the possibility of a correction or consolidation taking precedence in the near term.

On the other hand, a bullish picture will come into the picture if ADA/USD embraces support above $0.26. Moreover, trading past the stubborn resistance at $0.275 may open the road for gains towards $0.30 and perhaps restart the uptrend aiming for $0.4.