Cardano prices have been in a downtrend since June 3, with no significant higher highs, indicating that the market is being haunted by the bears. As ADA is trading in a tight range it will consolidate between two converging trendlines and a big breakout is expected.
Will Cardano Price Movement be a Fakeout?
Cardano’s price was trading above the 50% Fibonacci retracement level at $1.47 through mid-June. That situation changed, however, when ADA fell below it on June 18. Since then, Cardano’s price movement has shown itself in the form of lower highs and higher lows, suggesting the range is tightening.
Usually movements like this lead to big changes or massive moves.
Although traditional breakouts are looking for altcoins to break the declining trendline, investors should carefully watch the swing points ahead of them to see where ADA could be going.
Assuming the price of Cardano declines, it might get to the support level at $1.24. If selling pressures continue to mount, ADA could move down to $1.20. This decline will accumulate liquidity which is a clear sign that the increase is beginning.
As such, investors can expect a 10% correction and a $1.20 sweep, followed by a 16% uptrend to retest the $1.40 resistance. Breaking this level provides an opportunity to retest the 50% Fibonacci retracement level of $1.47.
ADA/USDT 4H Chart. Source: TradingView
Unless Cardano’s price rises above $1.20, the bullish argument mentioned above is in jeopardy. Such a move would indicate that the sellers are dominant and absorbing the buying pressure.
If so, ADA could revert to the subsequent swing low of $1.11 on June 23rd. Breaking this barrier will invalidate the bullish narrative and set in motion a downtrend that could push the price of Cardano into the $1 area.
This article is not a piece of financial advice, please do your own research before you invest or buy this asset.