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Amid the V-shaped recovery in the daily time frame chart, the Cardano coin price shows the formation of a falling wedge pattern. This chart structure is characterized by two converging trendlines that form a wedge shape and lead a temporary rally in an asset. Thus, in core concept, this pattern in some of the famous bearish continuation structures signals an upcoming downfall.
- A potential pullback may plunge the coin price to $0.35 support, followed by $0.323
- A minor correction phase could recuperate the bullish momentum for a sustained recovery in the long term
- The intraday trading volume in the ADA coin is $275.4 Billion, indicating a 24% gain.
In theory, as the trendlines converge during the wedge pattern formation, the price action becomes more confined, indicating a potential trend reversal from bullish to bearish. Typically, this pattern is confirmed when the price breaks below the lower trendline, signaling a trend reversal and a potential sell signal for traders.
By press time, the Cardano coin price trades at $0.394 with an intraday gain of 0.5%. However, on February 6th, the coin price breached the lower trendline, with a daily candle closing below it.
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This breakdown will intensify the selling pressure and trigger a significant downfall in ADA price. The post-breakdown fall could rumble the price 18% lower to hit the $0.323 mark. However, this potential correction can be considered a temporary retracement to replenish the bullish momentum.
However, the ADA price sustainability above $0.323 is important to maintain an overall bullish trend.
Relative strength index: contrary to the rising price action, the falling RSI slope projects the exhausted bullish momentum. This bearish divergence bolsters the possibility of a bearish pullback.
EMA’s: the 20-day EMA dynamic support may assist buyers in undermining the correction theory.
Cardano Coin Price Intraday Levels
- Spot price: $0.384
- Trend: Bullish
- Volatility: Medium
- Resistance level- $0.438 and $0.522
- Support level- $0.382 and $0.323