While long-term readings support the continuation of the Cardano (ADA) price increase, short-term ones are still undetermined.
ADA is the native token of the Cardano blockchain platform. The weekly time frame shows that the ADA price broke out from a long-term descending resistance line in January 2023. The line had been in place since the all-time high in August 2021. As a result, the breakout from it is expected to lead to a significant upward movement.
However, while the ADA token price validated the line as support in March 2023, the sharp increase has yet to begin. On the contrary, the price still trades below the horizontal $0.390 resistance area. Furthermore, the weekly RSI faces resistance at 50, another sign that the trend is not confirmed as bullish yet.
If the ADA price breaks out, it could increase to the next resistance at $0.580. However, if it gets rejected again, a drop to $0.300 could ensue. A look at a lower time frame is required in order to determine if the ADA price will break out or not.
Why is Cardano (ADA) Price Not Breaking Out?
The technical analysis from the daily time frame does not provide a clear Cardano price forecast. Despite a setback in February when the price failed to break through a crucial resistance level, the ADA price failed at breaking out above the $0.410 resistance area. Even though the RSI supports the increase, a breakout has yet to materialize.
If the breakout is successful, ADA could reach an average price of $0.560, but if it is rejected again, the price may drop to $0.325.
Finally, according to the short-term six-hour chart, the ADA price has increased within an ascending parallel channel since March 10th. This type of channel typically includes structures that eventually lead to breakdowns. The movement of the price has been erratic, indicating a bearish structure.
As a result, the price increase that has occurred over the past month may be the B wave in a corrective structure. If this scenario is true, the C wave will lead to a breakdown. This could cause the ADA price to drop to the $0.280 support.
On the other hand, if the ADA price breaks out of the channel and surpasses the resistance level of $0.410, it would invalidate the bearish view and result in an increase toward the resistance level of $0.560. Therefore, the next 24 hours will be crucial in determining the future trend.
To conclude, the most likely Cardano price forecast is a breakdown from the channel and decrease to the next closest support near $0.280. A breakout from the channel and the $0.410 area would invalidate the bearish forecast. In turn, it could cause a pump toward $0.560.
For BeInCrypto’s latest crypto market analysis, click here.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.
Source: https://beincrypto.com/ada-price-struggles-maintain-momentum/