Cardano (ADA) price is moving within a correction pattern and has created a bullish double bottom pattern.
Despite these bullish signals, ADA has fallen below a key horizontal support level. The reversal of the uptrend cannot be confirmed until the price recovers it.
Cardano price falls below support but creates a bullish pattern
Technical analysis on the daily chart provides mixed signals for ADA. On the bearish side, the price has fallen below the horizontal support area at $0.26.
This is a critical area as it has provided support since the June 10 low. At this point, the price recovered and created a long lower wick (green symbol) before confirming the area as support.
It is hovering just above the horizontal support area at $0.25. This is a key support area that has been in place since the beginning of the year.
However, the price movement has been contained in a descending parallel channel since July 14th. These channels usually contain correction patterns. If so, that would mean that the decline since July 14th is corrective and not the start of a new downward move. In this case, a canal breach would be likely.
Furthermore, the price has formed a double bottom pattern since August 14th. The double bottom is also considered a bullish pattern and was also combined with a bullish divergence in the RSI (green line).
A bullish divergence occurs when a decline in price is accompanied by an increase in momentum. This usually results in a reversal of the uptrend, and this is even more likely as it coincides with an uptrend.
The price movement within the zone gives contradictory signals. On the bullish side, ADA appears to have created a triple bottom pattern (green symbols).
A breakout of ADA price from the channel is likely to result in a 30% increase to the next resistance at $0.32. However, if the price is rejected, the future price scenario is likely to see a 20% decline to the channel support line at $0.20.
ADA price prediction: Will it recapture the horizontal support level?
Similar to the daily chart, the six-hour chart provides mixed values.
First of all, the price movement is showing both bullish and bearish signs. While ADA broke through a short-term descending resistance line, it is still trading below the lower horizontal area of ​​$0.25. You need to recover it to consider an uptrend.
The RSI also gives mixed signals. The indicator is rising and has created a bullish divergence. However, it has not yet crossed the 50 mark, which is necessary to confirm that the trend is bullish.
Therefore, the future ADA price prediction will determine whether the price breaks the channel and the $0.26 area or is rejected.
In the event of a breakout, a 30% increase could occur, while a 20% drop is likely if the price is rejected.
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Disclaimer
Disclaimer: In accordance with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto strives to provide accurate and unbiased reports, however market conditions are subject to change without notice. Always do your own research and consult a professional before making any financial decisions.
