Key Takeaways
Cardano (ADA) has experienced significant price fluctuations recently, with notable highs and lows suggesting a volatile market.
Despite temporary recoveries, ADA remains within a downtrend. This analysis examines recent price movements, potential reversal indicators, and key support and resistance levels.
The price of ADA reached nearly $0.80 on March 14 before dropping to a low of $0.32 on July 5.
After this dip, the price bounced back by 42% to peak at $0.45 on July 17, only to fall to a new low of $0.27 on Aug. 5.
Following a brief recovery to $0.40 on Aug. 24, ADA faced another pullback, dipping to $0.30 on Sept.6. An ascending support level emerged, with the price climbing to a slightly higher high of $0.42 on Sept.27.
ADA returned to this ascending support on October 10 and bounced 8% to trade at $0.36.
Despite an ascending pattern forming since Aug. 5, a complete five-wave structure has yet to appear, which would signal an established uptrend. ADA remains below the critical horizontal resistance at $0.40.
A breakout above $0.40 or below the ascending trendline will likely indicate ADA’s next primary trend direction.
The hourly chart reveals that the uptrend from Aug. 5 to 24 appears as a three-wave movement, suggesting an ABC corrective wave after ADA hit its yearly low on Aug. 5.
This analysis implies that the downtrend after the Aug.t 24 peak could mark the second correction, with a subsequent three-wave uptrend as part of a higher degree WXY pattern.
Using the Fibonacci extension, a price target of $0.30 aligns with the projection if the downtrend mirrors the previous decline from Sept. 27 to Oct. 3.
Its latest low on Oct. 26 was a brief spike below its horizontal support, but it quickly rose above it, resulting in an 11% recovery.
If ADA holds now overcomes ascending resistance at $0.35, a potential bounce to at least $0.40 remains possible.
In summary, ADA remains in a downtrend from its March high of $0.78, with no clear signs of a reversal. Further downside is expected in the short term, and only a breakout above the descending resistance from December’s high would strongly suggest a potential rally.