Cardano has been one of the altcoins that have been aggressively sold down over the past few months. The result of the sellers’ panic has been an over 50% crash in its price after it hit above $1 back in March. Since then, the sellers have remained in control of the price, pushing it back down toward the $0.57 level, where mounting support has begun to form. If this level holds, then it could carry some bullish implications for the cryptocurrency.
Cardano Breaking Out Of Descending Triangle
One setback that has plagued the Cardano price over the last few months is the fact that following the sell-offs, the altcoin found itself inside a descending triangle. This descending triangle has now persisted for months as the cryptocurrency continues to trade within it, according to crypto analyst melikatrader94 on the TradingView website.
The analysis focuses on the Cardano price being unable to break out of this big descending triangle over the last few months, leading to its suppressed price action. The analyst even pointed out the March rally, but explained that this was a breakout that eventually failed. This meant that Cardano continued to trade inside this bearish descending triangle.
Fast forward to the present, though, and things seem to be looking up for the altcoin. The analyst pointed out that it is now showing some bullish divergence on the chart, which is usually evidence that sellers are running out of steam and buyers are starting to catch up. As a result, the support has been mounting above $0.57, and bulls have held quite strong.
Now, if this support continues to hold, the crypto analyst predicts that the Cardano price could see another leg-up. The initial targets remain conservative at $0.67-$0.70. Nevertheless, hitting these targets would mean that the bulls are starting to take back control of the price.
The Bearish Thesis For ADA
Just as there is a bullish scenario for the Cardano price, there is also the possibility that it doesn’t go as expected. There is an invalidation level for this forecast, and that lies at the $0.53 support. This level has already proven to be a strong support point for Cardano. Thus, losing it to the bears would trigger further price crashes.
Melikatrader explains that if this $0.53 level fails, then the entire setup is actually off the table. It would mean a continuation of trading inside the descending triangle, with much lower targets as the triangle continues to widen in the absence of a breakout.
Featured image from Dall.E, chart from TradingView.com
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