Cardano Price Hits Yearly Low: Potential Retest of ADA 700-Day Resistance?
What's Next for Cardano After Yearly Low? | Credit: Hameem Sarwar
Key Takeaways
- Cardano’s price has decreased 50% since March, falling to a yearly low on April 13.
- ADA has completed a five-wave upward movement and could be in an A-B-C correction.
- Will the yearly low mark the end of the correction, or is another decrease in store?
The ADA price experienced a bullish start to 2024, culminating with a yearly high of $0.81 on March 14. This amounted to a 35% increase since the start of the year. Having said that, the trend quickly reversed in March and worsened in April. ADA has fallen 50% since its high, reaching a yearly low on April 13.
While the yearly low is a worrisome sign for ADA investors, the price still trades inside a long-term horizontal area, now acting as support. Can the area mark the bottom and trigger a reversal, or will the ADA price crash below it?
Cardano Price Yearly Low Retests Long-Term Resistance
In December 2023, the ADA price broke out from the $0.44 horizontal resistance area. Before the breakout, the area had existed since October 2022. ADA accelerated its increase after breaking out, reaching a new yearly high of $0.81 in March 2024.
Since then, ADA has experienced a 43% correction, marked by the creation of five bearish weekly candlesticks within a span of six weeks. The decrease took the price back to the $0.44 area, potentially validating it as support (green icons).
The area has intermittently acted as both resistance and support for the past 700 days.
Despite the bounce, the weekly RSI and MACD both give bearish readings. The RSI fell below 50 and the MACD made a bearish cross (red icons). As a result, looking at a shorter time frame is needed to predict if the bottom is in.
ADA Price Prediction: Short-Term Bottom Established?
The daily time frame chart shows the ADA price has completed a five-wave upward movement (black) starting on June 10, 2023. The increase continued for 278 days. Subsequently, ADA has corrected for the past 30 days.
Even though the correction reached the 0.618 Fibonacci retracement support level, it is extraordinarily short relative to the previous upward movement. Similar sharp but brief corrections are also present in Bitcoin and the rest of the crypto market.
So, it is possible the decrease is only the first part of a larger, A-B-C (black) corrective structure.
The daily RSI aligns with this possibility. The only two other times in the past 18 months the RSI fell below the current reading of 25 (red trend line) led to significant price bounces.
Due to this wave count, it is likely the ADA price will soon reach a local bottom, if it has not done so already. A substantial bounce toward the yearly high or at least $0.66 can happen.
Conversely, a daily close below $0.44 will put the count at risk and can lead to a deeper retracement toward $0.35.
ADA’s Yearly Low – Prelude to Another Dip?
The 50% ADA price correction culminated with a new yearly low on April 13. While deep, the correction is brief relative to the preceding upward movement. So, it could be just the first portion of a larger correction that could continue for the entirety of the second quarter of 2024. A meaningful short-term bounce will occur if this is the case.
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