In the daily chart, the Cardano price action moves under the influence of a strong resistance trend line, leading to multiple lower-high formations. The downtrend even breaks below the crucial support level of $0.25, leading to a steeper correction rally.
Cardano is currently trading at $0.244, down 0.41% today. Last night, the price hit the $0.25 ceiling and fell back down, creating a long-tail candle. It represents the ADA price retesting the broken $0.25 range and suggesting an upcoming downward trend.
Parallel to the downtrend, the ADA price action mimics a head and shoulder pattern formation with the neckline at $0.25. And the recent breakdown also signifies the bearish pattern breakdown in the Cardano coin price action.
According to the trend-based Fibonacci retracement, the next crucial support level is at $0.222 and $0.20 after the breakout of $0.235.
The bearish pattern breakout projects a potential downtrend to $0.15, accounting for a 37-40% correction.
Coming to the technical indicators, the RSI indicator displays a bullish divergence. As the ADA coin price transcends below $0.25. but the RSI line sustains over the oversold boundary. Meanwhile, the MACD indicator gives a bearish crossover. However, the sellers struggle to increase the bearish gap between the MACD and the signal line.
Will Cardano Find A Bounceback in 2023?
If the Cardano coin price breaks under the $0.235 support level, the downtrend continuation is expected to continue to the $0.20 mark. Moreover, the RSI indicator displays a strong bullish divergence in the daily chart, signaling a bullish revival soon.
However, on the flip side, a bullish reversal from $0.235 can again challenge the resistance trend line, accounting for a price jump of 10% to reach $0.25.