Cryptocurrency markets have seen Cardano (ADA) price make a notable comeback from the 100-day EMA slope at $0.57. This positive turnaround increased the value of the cryptocurrency by 20% within a week, reaching $0.683.
ADA’s Downward Trend Potential
However, the general supply at this level indicates that traders may be selling with a bullish swing, which could support the formation of downward trend patterns. The popular cryptocurrency entered the current correction trend in mid-March when the price returned from a high level of $0.81. The downward trend reduced the value of the altcoin by nearly 30%, bringing it down to $0.569.
While the current market recovery has pushed the ADA price to $0.636, the supply at the $0.683 level could indicate investors are selling this token with an upward trend. However, according to crypto analysts, the peak of the local market could signal a drop to the $0.57 support level for Cardano.
Cardano’s Chart Analysis
Experts believe that daily chart analysis shows a reversal of the downward movement, which could overturn the formation of an inverse chart pattern known as the head and shoulders formation. This downward trend, typically seen at the market’s peak, could signal a shift in trend control towards sellers and indicate that a significant correction is continuing.
However, the confirmation of this formation depends on the ADA price falling below the main neckline support of $0.57. Losing this support could also drop the indicated altcoin below a long-standing trend line that has shown a recovery trend for the past five months. The subsequent breakdown could extend the correction trend to $0.46, recording a potential loss of 18%. Conversely, if buyers defend the rising support trend line, they could have the opportunity to invalidate the bearish thesis. As a result, after the recent surge, Cardano’s price showed a significant rebound from the 100-day EMA slope, increasing by 20% within a week. However, analysts point to the possibility of downward trend formations and a continuation of the decline to $0.46 if the main neckline support of $0.57 is broken.
