by Cardano [ADA] the recent drop from the $ 0.66 level has crystallized into a downtrend channel on the daily time horizon. The EMA’s tapes coordinated with the 38.2% Fibonacci resistance to limit buying efforts over the past month.
The coin could provoke a favorable selling opportunity if the bears inflict a $ 0.51 reversal. As of press time, ADA was trading at $ 0.4995, up nearly 3.25% over the past 24 hours.
ADA daily chart
As the price action dipped below the EMA tapes, the immediate narrative for the altcoin took a bearish turn. The downward swing stopped near the Point of Control (POC, red) which highlighted a tough brawl between buyers and sellers.
The gains of the past ten days have helped buyers exit the long-term downtrend channel. Furthermore, ADA saw an ascending wedge structure approach the 38.2% Fibonacci resistance.
For over 100 days, price action has struggled to breach the upper limit of the EMA tapes. Any break above this level would put the halt for short term gains. In this case, the potential targets would remain in the $ 0.57 zone.
However, any immediate withdrawal from obstacles could prolong the compression phase in the next few sessions. This trajectory could trigger a reversal towards the $ 0.45 zone.
The Relative Strength Index took a bullish stance as it aimed to break out of the 56 level. A break above this resistance could foster short-term buying pressure.
Additionally, the MACD line saw a close above the zero mark and affirmed ease in selling vigor. Continued swing above equilibrium could invalidate bearish trends.
Furthermore, the Directional Movement Index (DMI) reaffirmed the bullish strength. But ADA’s ADX revealed a substantially weak directional trend.
With the current pattern approaching the 38.2% level and the EMA tapes, ADA could carry a downside risk. The goals would remain the same as above. A close above $ 0.515 would invalidate these bearish bias.
Finally, traders / investors should keep an eye on Bitcoin’s movement and its effects on the broader market to make a profitable move.