Disclaimer: The findings of the following article are the sole opinion of the writer and should not be taken as investment advice
Cardano’s valuation was continuing to hold its position above its immediate support level at $0.138, at press time. It must be noted, however, that over the past 2 weeks, it has declined gradually from $0.183 to under $0.160. While a clear-cut trend did not make itself obvious at the moment, ADA may undergo another bearish pullback over the course of the next few weeks.
Cardano 12-hour chart
Source: ADA/USD on TradingView
Cardano’s rally towards the end of November was scintillating, but since the 24th of November, it has been rather erratic. While the collective market has consolidated since, ADA has recorded a period of decline on the charts. At the time of writing, as illustrated by the 12-hour chart, Cardano was moving well within a symmetrical triangle.
While a symmetrical pattern may attain a bullish breakout, the chances of a bearish turnaround are also equally likely. The depleting trading volume was indicative of a bearish divergence, a development that shifts the momentum towards the sellers. Further, the 20-Moving Average was also acting as an immediate support level for the cryptocurrency.
Market Reasoning
Source: ADA/USD on TradingView
Most market indicators, at press time, were on the neutral side but by and large, they were leaning slightly towards the bears. The Relative Strength Index or RSI gradually fell over the past few days, touching a lower range right above 50. Further, while the Awesome Oscillator or AO pointed to declining bearish momentum, the On-balance volume remained at a high for Cardano. Any shift from here will only take place with the sellers acting quickly to attain profits, while the price continues to decline in the market.
Important Range
Resistance: $0.171, $0.183
Support: $0.138
Entry Position for Short Trade: $0.160
Take Profit: $0.138
Stop Loss: $0.167
Risk/Reward Ratio: 3.14x
Conclusion
At the time of writing, Cardano seemed prime to register another drop down to its previous top at $0.138, but the valuation should bounce back right after. With weak hands dissolving under the bullish market structure, ADA should be able to re-trace after its depreciation.
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