Boring cryptocurrency markets have made investors more cautious and even prompted many to withdraw. With volumes dropping below $30 billion, we continue to see reluctance in the market. However, some altcoins appear to be on the verge of major movements. The current setup is intriguing for investors.
The price of Cardano (ADA) is trading within a corrective formation and has formed a double-bottom bullish pattern. Despite the bullish outlook, this popular cryptocurrency has fallen below a significant horizontal support level.
It is important for the price to reclaim the $0.26 level. This region, which has served as support since June 10, triggered a bounce. At the time of writing, the price is just above the $0.25 support. ADA Coin investors have kept the price within a decreasing parallel channel since July 14. These channels typically contain corrective formations. If so, it would mean that the decline since July 14 is more of a corrective phase rather than the start of a new downward movement. In that case, a breakout from the channel could be seen in an upward direction.
In addition to the breakout prediction from the mentioned channel, the price has formed a double-bottom pattern since August 14. The double bottom is also considered a bullish formation and is supported by bullish divergence in the RSI. When a price drop combines with an increase in momentum, a bullish divergence occurs. This often leads to a reversal of the uptrend and is even more likely when it coincides with a bullish formation.
A possible price breakout could initiate a move to $0.32 with a 30% increase. However, in the opposite scenario, we could see a 20% decline towards the $0.2 support line.
Short-term readings on the six-hour chart are sending both bullish and bearish signals. While ADA is breaking out of the short-term descending resistance line, it is still trading below the small $0.25 horizontal range. It needs to reclaim it to consider an upward trend.
In conclusion, the next move for ADA Coin investors will depend on whether convincing closes below $0.26 can be achieved. A breakout in the upward direction could bring a 30% increase, while in the opposite scenario, a 20% loss could occur.