Since reaching an all-time high in September, Cardano (ADA) has been in a corrective trend. There are currently no bullish reversal indicators in existence.
Since reaching an all-time high of R50 on September 2, ADA has been declining. The decline has been rapid, with a low of R6,44 reached on May 12.
While the price has since bounced marginally, there are no strong bullish reversal indicators. The weekly RSI, on the other hand, is dropping and is already below 50.
If the bearish trend continues, the nearest support level would be R5.79. This is a key horizontal support level because it served as resistance in May 2018 before becoming support in November 2020. @Pentosh1 of cryptocurrency trader @Pentosh1 posted an ADA chart showing an 85% loss since the all-time high. The current price of R7.24 represents a drop of exactly 85%.
Reduce the interior channel
Since the aforementioned all-time high, ADA has been dropping within a declining parallel channel on the daily chart.
While such channels typically contain corrective movements, implying that a breakout would be likely, the price was denied by the channel’s resistance line on June 9. Since then, it has been dropping.
In addition, the daily RSI has broken through its ascending support line (green line).
If the R5.79 area fails to provide support, the next closest support level, provided by the channel’s midpoint, is at R2.41. (red circle).
The ADA breaks down
Finally, the six-hour chart reveals that ADA has already deviated from an upward parallel channel. This increases the likelihood that the negative trend will continue.
In addition to the double bottom support at R6.44, an external Fib retracement on the most recent upward trend yields targets of R5.31 and R3.70. The former also corresponds to the level of long-term support, which increases its significance in the process.