Cardano, also known as the Ethereum-killer blockchain, initiated a fresh upward trajectory from the last week as the altcoin market witnessed a major explosion in the price chart since the beginning of the new year. Moreover, ADA’s price has been significantly blown with the current market conditions to mark a notable bullish rally as the network’s developing team, Input Output Global (IOG), reveals developmental enhancements this week.
According to Cardano’s co-founder, Charles Hoskinson, IOG released a toolkit for developers to build side chains of their projects on the Cardano blockchain, shaping a solid roadmap for the ADA token ahead. However, a skyrocketing rally in the ADA price chart may soon turn out to be bull’s trap, resulting in a sharp price slump in the next week with a market cooldown.
ADA Price Shows Signs Of Bearish Reversal!
ADA price has been impressively performing since the beginning of 2023 and has caught the attention of top market analysts and investors with continuous bullish trading sessions. Furthermore, the slowdown in the US inflation data provides solid strength to the altcoin market and pushes major altcoins like ADA to the North.
Though ADA has returned investors over 55% ROI since the price bottom in November, several crypto analysts believe this uptrend could be the beginning of a stretched downtrend, plunging ADA to its monthly lows.
A well-known crypto analyst, VF Investment, gives an eerie feeling for ADA with a bearish sentiment. According to the analysis, the ADA token is poised to retest its strong resistance at $0.405, from which ADA may validate further price movements.
The analyst further states that ADA has been forming a falling wedge pattern since September, and a breakout above $0.4 may be a crucial game-changer for the token to reject its current bearish predictions and head toward new highs.
However, the analyst warns traders of its consequence because a failure to hold ADA’s price near $0.4 may plunge the altcoin into trading below $0.165, bringing a 60% drop from its current price levels.
Is There A Turnaround Due For Cardano?
ADA price seems to stick with the current bullish market conditions as bulls are building great dominance and buying pressure in the price graph. Moreover, the correlation between Bitcoin and the altcoin market has been overwhelming as BTC’s trade above the $20K level may become a catalyst for ADA for a potential bull run and fill investors with bullish hopes.
According to CoinMarketCap, ADA price currently hovers around $0.35 with an uptrend of nearly 1%. Looking at the daily price chart, Cardano may flash strong bullish signals near its 23.6% Fib retracement if it successfully holds near $0.365.
However, the RSI-14 is trading on a parallel channel with stochastic RSI at the level of 76, signifying an overbought region that may thrash ADA downward if it continues to face rejection near the EMA-100 trend line. If the ADA token breaks below $0.33, it may trigger a bearish bloodbath and aim to trade below its Bollinger band’s lower limit of $0.28, where EMA-20 and EMA-50 coincide.
However, ADA may pave a smooth uptrend if it breaks above its weekly RSI level and trades above $0.36, after which the ADA token may skyrocket to break its Bollinger band’s upper limit near the EMA-200 line at 0.43.
Moreover, the MACD line continues to climb slowly above the signal line with SMA-14 trading in a bullish region at 65, forcing the ADA token to retest its resistance near $0.36. It is to be noted that a breach of its bullish analysis may bring Cardano to trade near its 2022’s lows and challenge November’s price trend.