Cardano Price Analysis: Key Resistance Levels and Trend Reversal Risks
- Cardanos price faces a critical moment, with potential to challenge $1.15 resistance but also risks a sharp drop to $0.51.
- The ADX indicator shows weakening momentum for ADA, suggesting consolidation or a trend reversal unless buying pressure returns.
- Cardanos Ichimoku Cloud chart signals bullish potential, but narrowing EMA lines warn of a possible short-term pullback.
Cardano (ADA) is in a critical zone; the price may be indicating a reversal to the upside and the momentum is waning. As of recent, ADA may likely challenge the resistance levels of $1.15 and even climb up to $1.20 in case the trend picks up again. However, it is not without the risk of a severe bearish breakout, which could see XRP/USD prices plummet down to a low of $0.51.
The current market sentiment for ADA is somewhat ambiguous and is visible on the DMI chart. The ADX (Average Directional Index), a leading indicator of the trend, is now at 24, from a high of 60 in the last few days. The higher the ADX readings above 25 it means that there is a strong trend while in the lower values below 20 it shows weak or dropping momentum. The fall in the ADX shows that the uptrend of Cardano is weakening and could turn sideways if the buyers fail to gain momentum.
Source: TradingView
Cardano Faces Potential Correction
Despite the fact that the positive directional indicator (D+) remains higher than the negative one (D-), with relative values of 22.5 and 19, the gradual decrease in the gap between these two indicators should be worrisome. This means that even the uptrend is slowly starting to wane and if bearish pressure intensifies then there is a chance Cardano will shift to a neutral to bearish market sentiment. It means that D+ should become stronger to extend the upward momentum, sending the ADX back over 25 to indicate renewed buying pressure.
The price of Cardano can be analyzed with the help of the Ichimoku Cloud chart, where the trend is now rising. Cardano is trading above the cloud, which means that the bulls are still in charge of the market. This cloud chart is rising which gives positive signals and supports the optimism of Cardano price. But the fact that Tenkan-Sen (blue line) and Kijun-Sen (orange line) are closing the gap indicates that the cryptocurrency is in the process of consolidation after previous growth. This is rather suggestive of modest loss of steam and a near-term correction may well be on the cards.
Source: TradingView
Price Above $1 Key for Uptrend
On the other hand, if the price goes higher than the present resistance levels, and holds this position it will be an indication that the upward trend is still in force and that more gains may be recorded. Consequently, if ADA seals a 4-hour candle above the $1 mark, the bullish trend for Cardano will be boosted, and the target will be at $1.25, according to the crypto analyst Sssebi.
At the moment there is a period of great uncertainty, but Cardanos short-term moving averages (EMA) are still positive as the short-term EMA lines are above the long-term ones. This is a common feature of an ongoing uptrend.
However, the convergence of these two EMA lines may indicate that the bullish trend is weakening up. The trend may fizzle out if the buying pressure increases, and ADA might require assistance to break past certain barriers.
Source: TradingView
At the present stage, when Cardano is at a critical point in its price movement, traders will be waiting for the signs of the further continuation of the growth or the beginning of the downside movement. Any move above $1 would suggest that bulls are back in the driving seat, while a break below indicated support levels may produce a larger pull back. The price of Cardano in the future will be determined by the continuation of the price above crucial support levels in the next few days.
Read more: https://www.tronweekly.com/cardano-price-analysis-key-resistance-levels/
Text source: TronWeekly
