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Cardano’s price action has continued to stall below the $1 threshold in light of the corrections of the last seven days. This correction, which affected the entire cryptocurrency sector, saw Cardano fall below the $1 threshold again 18% in December.
Although the broader trend suggests a possible shift to the weekly time frame towards a new all-time high (ATH), recent technical analysis on TradingView opened the possibility of a continued correction towards $0.43 before another strong upward move.
Current price movements highlight resistance and cooling period
According to the technical analysis of Cardano (ADA) Price Action. On the weekly candlestick time frame, the cryptocurrency encountered notable resistance around the $1.2046 mark. This resistance emerged later Cardano’s notable 205% increase from $0.4322 at the end of October to $1.32 at the end of November.
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Interestingly, this notable price increase has seen Cardano form significant lows that act as support levels for the price. Furthermore, the rally ended with Cardano entering the overbought zone on the Relative Strength Index (RSI) indicator. The rally culminated with Cardano price peaking at 82.87 on the RSI, but has since returned to a cooling/corrective period where buying pressure is consolidating as of this writing.
Cardano’s consolidation has opened up perspectives on its next direction, with substantial buying volumes observed in recent trading sessions.
A deep correction could test the critical support at $0.43
While the long-term outlook remains bullish, the analysis highlights the scenario of a deep correction that could push Cardano’s price further down in the near term. With this in mind, the analyst points to support levels that ADA could revisit in the event of a deeper correction. The first key level at $0.7683 has already proven its importance, acting as a reactionary zone in recent price movements.
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Below this level, $0.4322 represents the ultimate support for the current bullish phase. This means that ADA needs to hold above the $0.43 support level for an bullish trajectory to remain valid. Failure to hold above $0.43 will likely result in further price declines at this point and a change to a bearish outlook.
The analyst also identifies $0.3166 and $0.2427 as primary supports. These levels represent Cardano’s lowest support during the previous bear market and are considered less likely to break above in the event of a long-term decline.
Despite the potential for a deep correction, Cardano recent market behavior and purchasing trends suggest to promising long-term prospects. At the time of writing, ADA is trading at $0.912 and is up 2% in the last 24 hours. Once it clears the current resistance at $1.2046, ADA is well positioned to challenge its all-time high of $3.09 and possibly set new highs in the current cycle.
Featured image created with Dall.E, chart from Tradingview.com