Technical Analysis and Market Entry: Cardano’s ADA Set For Potential Fall Into Unchartered Territory

Cardano
  • Cardano’s ADA continues to be at the mercy of the stubborn bearish trend, failing to find any stable ground.
  • ADA/USDT has been falling for the last going on 13 weeks, having dropped as much as 57%.

ADA/USDT: Recent Price Behavior

Cardano’s ADA is moving within consolidation mode, which remains very much favorable to the bears. The sellers have been in control of the price for the last 13 weeks, minus a couple that managed to finish marginally in the green. It has seen ADA/USDT drop a chunky 60%, after trading as high as $0.1070 in June, which was the highest since August 2018.

The bears took firm control of the price, forcing it down to $0.0435 in September, which was the lowest it had been since March 2019. ADA/USDT is demonstrating similar price behaviors to the bear market of 2018. It was a time when ADA had to concede in bottoming down at lows of $0.0270 in December 2018. A time during which the entire cryptocurrency market was going through a sizable corrective stage, following the big bull run in 2017.

Over the last going on four weeks, the price has broken closed below and retested a critical area of demand. It is seen running from $0.0525 down to $0.04650 – an area of which has proven to serve as both support and resistance. During the bull run observed in the first half of 2019, the price in March jumped higher using this detailed zone. Chunky buying momentum was found here, after managing to break above.

ADA/USDT daily chart.

Bearish Technical Patterns

Following the bears breaking down a critical ascending trend line of support, the price has been stuck within a stubborn bearish trend. During the deep falls south, there are brief periods of consolidation, where ADA takes a breather from the selling pressure. Price action then forms bearish technical structures, which are further capitalized on by the bears.

There have been numerous bearish pennant structures between July and August, which have been breached to the downside. Since the most recent fall, price action again via the daily is consolidating. A narrowing in conditions for ADA/USDT from 29th August has resulted in the formation of a bearish flag pattern.

Trade Recommendation

Given the above-detailed bearish flag structure, eyes are on another deeper drop to the downside. In terms of targets, $0.03500 and then $0.02750 are eyed.  An entry would be around current market price. Stops would be placed just above the noted pattern at $0.05000.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.