Cardano (ADA) Price Correction Could Be Over Following 25% Pullback
Is the ADA Correction Over? | Credit: Hameem Sarwar
Key Takeaways
- Cardano (ADA) has increased by 195% in November.
- The ADA price reached a 959-day high on Nov. 23.
- When will the short-term ADA correction end?
To start November, the Cardano (ADA) price created three successive bullish weekly candlesticks, increasing by 275% and leading to a 959-day high of $1.15. The upward movement took the ADA price to the long-term resistance of $1.15, which rejected it.
Nevertheless, the ADA decline may be over after a $25$ drop since the highs. Let’s examine the ADA price movement to isolate some levels that can stop the short-term correction.
ADA’s November Increase
The weekly time frame chart shows that the ADA price has increased rapidly since creating an inverse head-and-shoulders pattern between April and October.
The price increased without any visible pullbacks until Nov. 24, culminating with a high of $1.15. This was the highest price since April 2022.
Despite its increase, ADA failed to break out from the long-term horizontal resistance at $1.15. Rather, it was rejected (black icon), creating a bearish weekly candlestick. The Cardano price has decreased by 17% since the rejection.
Technical indicators are bullish. The weekly Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) generated bullish divergences before the breakout and are increasing.
Additionally, they are above their bullish thresholds at 50 and 0, respectively. So, despite the short-term decline, the long-term ADA trend is likely bullish.
ADA Price Correction Over
The daily time frame wave count suggests that ADA is in wave four of a five-wave increase (black). Wave three is extended, and the sub-wave count is yellow.
Wave four’s bottom may be in since the price reached the 0.382 Fibonacci retracement support level at $0.832.
However, the structure could develop into a symmetrical triangle, the most common pattern for a wave four.
If this is the case, the ADA price will consolidate for a short period before eventually breaking out.
Since there is no bearish divergence in the RSI and the MACD has not made a bearish cross, the upward movement is likely not done yet.
The first target for the top of wave five is at $1.33, created by the 0.382 Fibonacci retracement resistance level of the entire downward movement since the all-time high.
Conversely, if wave four deepens, the ADA price may fall to $0.73 before resuming upward movement.
Bullish December
Cardano has been one of the best-performing large-cap cryptocurrencies in November.
Even though it has fallen in the past three days, the decline is likely a short-term correction that will end soon. Afterward, ADA could increase toward $1.33 and possibly $1.67.
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