Cardano price at risk of 15% drop, analyst warns it could become ‘bloody’

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Current Cardano price is in a risky situation, and technical analysis indicates the possibility of a significant price correction. Analysis performed on the 4-hour candlestick chart and shared on TradingView indicates a potential 15% decline in Cardano’s price in airy of the recent break below the exponential moving averages (EMAs).

Cardano price falls below the EMA, opening a bearish scenario

As noted by a cryptocurrency analyst (SwallowAcademy) on the TradingView platformCardano started the week with four consecutive declines on a 4-hour time horizon, leading to a decline below exponential moving averages (EMAs). This drop below the EMA on the 4-hour time horizon has created a bearish outlook of sorts, which in turn poses the risk of Cardano price falling further in the miniature term. Given the potential for more price decline, technical analysis shows that there is no liquidity zone near the current price action that could provide a quick level of support for Cardano.

The closest support level is around 7% off Cardano’s current price, and the analyst suggests the cryptocurrency could return to this level around $0.83. If this support fails, the analyst warns of an additional 8% drop, which will quickly cause Cardano’s price to drop further to $0.76.

Taken together, this would mean a quick 15% drop in Cardano’s current price by the end of the week, which the analyst says could be bloody. “Eyes wide open; it may be bloody,” said the analyst.

The bearish scenario may be invalidated

While the bear scenario is still valid, the analyst also presented a potential scenario that could invalidate this outlook. AND hence the forceful upward rebound could result in Cardano price breaking above the $0.98 mark and a rapid change in the short-term price outlook. This is the kind of rebound that Cardano would bring above EMA again and indicate a renewed escalate in dynamics to reduce the risk of further declines. The analyst noted that in such a case, Cardano would be able to do so exceed $1.02 and will eventually reach $1.2-1.3 in the next few days.

At the time of writing, Cardano is trading at $0.9544 and is up 1.57% in the last 24 hours. Let’s hope that the cryptocurrency can continue this upward movement invalidate the bearish scenario.

Ultimately, the next few days will decide what scenario will play out for the Cardano price. If the bear market develops as expected, a 15% correction could create fresh challenges for ADA holders. On the other hand, a rebound above USD 0.98 is sanguine again for Cardano to retest $1.2, its highest price level in over two years, and eventually break above it.

ADA price enters bullish territory | Source: ADUSDT on Tradingview.com

Featured image created with Dall.E, chart from Tradingview.com

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