Cardano (ADA) Price Struggles, Drops 14% After Reaching Horizontal Resistance

Key Takeaways

• Wave 4 correction targets 0.618 Fibonacci retracement for support.
• RSI shows neutral momentum, aligning with consolidation.
• Wave 5 targets above $1.55, contingent on bullish momentum.

Cardano (ADA) is currently navigating a critical phase within its Elliott Wave structure. The daily chart highlights a Wave 4 correction in progress and an hourly chart potential breakout setup.

These patterns suggest that ADA is setting the stage for its next impulsive move, contingent on the resolution of the current corrective phase.

ADA Price Analysis

The daily chart reveals that ADA recently completed an impulsive Wave 3, reaching a local high of $1.31 on Dec. 3, followed by an ABC corrective phase on Wave 4.

This correction aligns with a descending triangle formation, testing significant Fibonacci retracement levels.

The price hovers near $0.89, close to the 0.382 Fibonacci level, with the 0.5 retracement at $0.81 acting as critical support. 

The daily Relative Strength Index (RSI) shows a mild bearish divergence, signaling weakening upward momentum during the Wave 3 peak.

However, the retracement appears measured, indicating the correction may be nearing completion. Wave labeling highlights the corrective subwaves (a)-(b)-(c), with the “c” wave possibly forming the terminal low near $0.70.

A sustained breakout above $1.07, the 0.236 Fibonacci retracement, could signal the resumption of Wave 5.

The overall structure suggests that ADA remains in a broader uptrend, with this correction setting the foundation for the next impulsive move.

ADA Price Prediction

The hourly chart provides a granular look at the corrective wave nearing its culmination. The price recently broke below local support at $1.07, with immediate support resting at $0.89. 

Fibonacci extensions suggest that Wave 5 could aim for $1.39 (0.618 extension) and potentially $1.55 (0.786 extension), provided the correction concludes near the projected 0.618 retracement.

The current price action shows a rejection at $1.01, which has now turned into resistance. The RSI on this timeframe is approaching oversold conditions, supporting the hypothesis of a near-term reversal.

If Wave 5 initiates, it will likely follow a five-subwave structure, with initial resistance at $1.13 before climbing towards higher targets.

However, this bullish scenario is invalid if the price falls below $0.81, the 0.5 retracement on the higher time frame chart.

Key Levels to Watch

• Immediate Resistance: $1.01 (near 0.236 Fibonacci retracement).
• Key Support: $0.89 (current level).
• Critical Support: $0.70 (0.618 Fibonacci retracement).
• Short-Term Target for Wave 5: $1.39 (0.618 Fibonacci extension).
• Invalidation Zone: Below $0.70, confirming a deeper correction.

In conclusion, ADA remains in a corrective phase within its broader uptrend. The price structure and momentum indicators suggest the potential for a bullish breakout, provided key supports hold.

Focus on $1.01 and $0.89 for near-term direction while targeting $1.55 for Wave 5 completion.