Cardano (ADA) Holds $0.50 Support While Price Consolidates in Tight Triangle Pattern

Key Takeaways

• Despite a recent bounce, ADA trades within a symmetrical triangle, suggesting indecision between bulls and bears.
• On-chain Weighted Sentiment is negative, indicating that the broader crypto community remains bearish.
• Cardano’s price is below the 20 EMA, indicating that if it remains the same, a breakdown toward $0.40 is likely.
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Like other altcoins, the chain of events since last week’s ‘Liberation Day’ has negatively affected Cardano’s (ADA) price. It worsened on Monday as Cardano’s price flashed a bearish engulfing candle that led to a 15% decline.

Despite being initially crushed by these new policies, Cardano’s price found relief. In the last 24 hours, ADA’s market value has increased by nearly 13% while failing to drop below the crucial $0.50 support.

However, according to several indicators, this bounce does not imply that the token might continue to climb higher. Here is why.

Cardano Moves From Relief to Resistance

On March 2, ADA’s price skyrocketed from $0.58 to $1.15. However, the altcoin has erased those gains, falling to $0.51 yesterday before its recent bounce to $0.58.

Even though Cardano’s price bounced, the token still trades within a symmetrical triangle. A symmetrical triangle is a technical pattern that does not necessarily signal a bullish or bearish breakout.

In this case, two trendlines converge, connecting a series of lower highs and higher lows. This indicates that both buyers and sellers are pulling the price toward their preferred direction, but neither side is dominant yet.

Amid this move, the Moving Average Convergence Divergence (MACD) reading stayed negative. The negative reading of the MACD indicates that momentum is bearish.

If this remains the same, the ADA might not close above the upper trendline of the triangle but instead remain confined within it.

From an on-chain perspective, Santiment data shows that the Weighted Sentiment around ADA remains negative. Weighted Sentiment tracks comments about an asset on social media platforms, asking if they are bullish or bearish.

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When the reading is positive, the sentiment is bullish. On the flip side, a negative rating indicates a bearish sentiment.

Should this sentiment remain the same, then Cardano’s price might fail to build on its margin increase.

ADA Price Analysis: Capital Sidelined

Per its short-term outlook, analysis of the daily ADA/USD chart shows that the price is still below the 20-period Exponential Moving Average (EMA). The 20 EMA acts as a key support level, and trading below it means the trend is not bullish.

With its volume sitting at around 16.02 million, Cardano’s price might not be able to hold the $0.50 support for long. In addition, the Chaikin Money Flow (CMF) attempted to widen the gap above the zero signal line.

But it could not hold the line and has not retraced to the negative region. This indicates that buying pressure is yet to come in as market participants seem to be preserving their capital.

Should this remain the same, ADA’s price might close below the lower trendline of the symmetrical triangle. If validated, the altcoin’s next move might be a decline below the 0.236 pullback region and toward $0.40.

However, increased volume backed by buying pressure could change this trend. In that scenario, ADA might jump above the 20 EMA and hit $0.68.