Cardano (ADA) Price Analysis: More Downside Coming

Cardano's price has slipped by nearly 12% over the past week. This performance aligns with CCN's recent analysis that suggested the cryptocurrency was at risk of sliding below a key support level.

Cardano’s price has slipped by nearly 12% over the past week. This performance aligns with CCN’s recent analysis that suggested the cryptocurrency was at risk of sliding below a key support level.

At the time of writing, ADA changes hands at $0.72, still a considerable distance from the psychological $1 benchmark that bulls had hoped to reclaim.

This latest decline highlights a continuation of bearish sentiment surrounding the token. Despite intermittent attempts at recovery, Cardano’s price is unlikely to experience a quick rebound anytime soon. Here is why.

Cardano Collapses, Enters Bearish Phase

On May 13, Cardano’s price consistently created four green candlesticks on the 4-hour chart. As a result, the altcoin hit higher highs and eventually peaked near $0.84.

But today, that trend has been invalidated. As seen below, ADA has hit lower highs and lower lows on the same timeframe.

This development has led it to form a descending channel, also known as a falling channel. This pattern’s upper trendline (lower highs) indicates resistance.

The lower trendline, on the other hand, indicates weak support. From the image below, Cardano’s price established support at around $0.74. However, with the recent breakdown below that threshold, the price action suggests a continuation of the bearish trend.

In addition, the Relative Strength Index (RSI) has fallen below the neutral line, indicating bearish momentum. Should this trend continue, ADA’s market value could be lower.

ADA Price Analysis: More Downside Coming

Away from the 4-hour analysis, we also examined the ADA/USD daily chart. Since April 8, ADA’s price has been hitting lower highs on this timeframe.

However, the current technical setup shows that the price has fallen back to the crest of the lower highs. Amid this drawdown, the Moving Average Convergence Divergence (MACD) has become negative.

Negative readings of the MACD signify bearish momentum. Besides that, the Exponential Moving Average (EMA) on the MACD has formed a bearish crossover.

For context, a bearish crossover occurs when the shorter EMA slides below the longer EMA. In this case, the 12 EMA (blue) has crossed below the 26 EMA (orange).

If this trend continues, Cardano’s price will likely decline to $0.67 near the 0.236 Fibonacci retracement line. In a highly bearish case, the cryptocurrency’s market value could drop to $0.51.

On the contrary, this trend might change if the crossover turns bullish. ADA’s price could breach the resistance at $0.77 if that were to happen.

Should that be the case, the altcoin could surge to $0.93 near the 0.618 golden ratio.