The Cardano price currently is in a risky position, and technical analysis highlights the possibility of a significant price correction. Analysis conducted on the 4-hour candlestick chart and shared on TradingView suggests a possible 15% decline in Cardano price amid a recent break below the Exponential Moving Averages (EMAs).
Cardano price falls below the EMA and opens a bearish scenario
As stated by a crypto analyst (SwallowAcademy). on the TradingView platformCardano started the week with four consecutive bearish candles on the 4-hour timeframe, resulting in a decline below the Exponential Moving Averages (EMAs). This drop below the EMAs on the 4-hour timeframe has sparked something of a bearish outlook, which in turn increases the risk of Cardano price falling further in the near term. Given the possibility of further price declines, technical analysis shows that there is no liquidity zone near the current price action that could serve as a quick support level for Cardano.
The nearest support level is around 7% from the current Cardano price, and the analyst believes the cryptocurrency could revisit this level at around $0.83. Should this support fail, the analyst warns of another 8% decline, which would quickly push the Cardano price further to $0.76.
All in all, this would mark a rapid 15% decline from the current Cardano price by the end of the week, a move that analysts say could be bloody. “Here the eyes are wide open; it could be bloody,” the analyst said.
The bearish scenario can be invalidated
Although the bearish scenario still exists, the analyst also indicated a possible scenario that could invalidate this outlook. A There is a strong upward trend from here could push the price of Cardano above the $0.98 level and cause a rapid shift in the near-term price outlook. Such an upswing would bring Cardano again above the EMAs and suggest renewed upward momentum to reduce the risk of further declines. The analyst noted that Cardano would be able to do this in such a case rise above $1.02 and eventually reach $1.2 to $1.3 in the next few days.
At the time of writing, Cardano is trading at $0.9544 and is up 1.57% in the last 24 hours. Hopefully, the cryptocurrency can continue this upward movement to refute the bearish scenario.
Ultimately, it will be decided in the next few days which scenario develops for the Cardano price. If the downtrend develops as expected, the 15% correction could bring new challenges for ADA holders. On the other hand, a bounce above $0.98 would reignite optimism that Cardano retests and eventually breaks above the $1.2 mark, the highest price level in over two years.
Featured image created with Dall.E, chart from Tradingview.com