Cardano (ADA) Faces Correction After Reaching New Yearly High; Technical Analysis and Price Prediction
The Cardano (ADA) price experienced a significant surge, reaching a new yearly high of $0.68 on December 14. However, the momentum was followed by a correction, ending a streak of eight successive weekly bullish candlesticks. The ADA price has slightly declined since its peak, prompting analysis on potential correction levels and future trends.
Technical Analysis Highlights Key Patterns: Breakout from Horizontal Resistance: ADA’s price surge in recent months involved breaking out from a long-term horizontal resistance area that had persisted for 420 days. Bearish Candlestick and Subsequent Decrease: After reaching the yearly high, a bearish candlestick was observed with a long upper wick, signaling a potential reversal. The ADA price has experienced a slight decrease since then.
RSI Indicator and Market Sentiment: The Relative Strength Index (RSI), a momentum indicator, is employed to identify overbought or oversold conditions. Despite the recent decrease in ADA’s price, the RSI remains above 50 and is moving upwards. This indicates that, from a sentiment perspective, bulls still hold an advantage.
ADA Price Prediction – Correction or Extension?:
- Elliott Wave Theory Analysis: Technical analysts use the Elliott Wave theory to identify long-term price patterns and investor psychology. The current ADA analysis suggests that the cryptocurrency is in wave four of a five-wave upward movement.
- Resistance Areas and Potential Correction: The main resistance area is identified at $0.68. If ADA breaks this level, it could rapidly increase to the next resistance at $0.90. However, the likely scenario is a correction, with ADA falling by 18% to the 0.382 Fib retracement support level at $0.50.
- Bearish Divergence and Correction Indicators: The daily RSI has generated a bearish divergence (green line), supporting the notion of a correction in ADA’s price.
Conclusion – Future ADA Price Scenarios: While the analysis suggests a potential correction for ADA, breaking above the $0.68 resistance could lead to an extension of the current upward movement. In such a case, ADA might experience a 40% increase to the next resistance at $0.88. The dynamics between correction levels and potential extensions will likely influence ADA’s short-term price trajectory.
Note: ADA’s price movements and technical analysis are subject to market dynamics, and predictions may evolve based on ongoing developments.
