Cardano Price Prediction: ADA sets up the stage for 10% correction
Crypto News

Cardano Price Prediction: ADA sets up the stage for 10% correction

  • Cardano price is forming a rising wedge pattern, hinting at a 16% drop.
  • The pullback might be cut short due to the demand zone, extending from $1.488 to $1.566.
  • A decisive 4-hour candlestick close above $1.852  will invalidate the bearish outlook.

Cardano price shows the formation of a setup that hints at a breakdown. The resistance level present above the current position adds credence to this drop.

Cardano price on the verge of a downswing

Cardano price has been setting up higher highs and higher lows since May 28. A rising wedge pattern appears to form when these swing points are connected using trend lines. Such a converging price action for ADA tends to result in a violent drop after a decisive close below the lower trend.

As such, the technical formation forecasts a 16% downswing, obtained by measuring the distance between the first swing high and low. Adding this measure to the breakout point at $1.725 move places Cardano price at $1.448.

While a 16% correction seems plausible from a theoretical perspective, the presence of the demand zone, ranging from $1.488 to $1.566, might stunt this drop.

Hence, investors can expect a 10% drop to $1.566 or a sweep into this zone. Only in extremely bearish scenarios, ADA price might break below the said support area and head toward the theoretical target point at $1.448

ADA/USD 4-hour chart

ADA/USD 4-hour chart

While the bearish descent seems to be fixed due to a rising wedge, investors should note that this pattern is formed on an uptrend.  Therefore, a sudden spike in potential buying pressure could tilt the odds in the bulls’ favor.

The stiff resistance level at $1.833 has prevented Cardano price from moving higher for nearly two weeks. Hence, a decisive close above $1.852 will invalidate the bearish narrative detailed above and kick-start a bullish outlook.

In this case, ADA price might rally 10% to tag the resistance level at $2.037.

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.