According to chart indicators, Cardano's price has just broken through a key resistance level, raising hopes for a potential upward trend. While the cryptocurrency is preparing for a possible bullish rebound, a cryptocurrency analyst also shared the downside risks that Cardano may face if it fails to hold the key support level.
Cardano price breaks through descending wedge resistance, signaling an upward trend.
The price of Cardano seems to be on a clearly bullish trajectory, as a cryptocurrency analyst named 'MyCryptoParadise' shared an in-depth analysis of its recent price movements on TradingView. According to this cryptocurrency expert, Cardano has just broken through the descending resistance level in its descending wedge pattern.
This movement is generally seen as a bullish signal, as the descending wedge chart pattern is often associated with positive trend reversals. The descending wedge pattern is a unique technical indicator that occurs during an uptrend. It is characterized by two descending trend lines, one representing the highs and the other representing the lows.
This cryptocurrency analyst stated that Cardano's price is approaching a unique level, which he calls the 'demand zone.' If it can start a strong rebound from this point, Cardano may begin its anticipated upward trend at this critical level.
The demand area at $0.0313 is an important support level that could spark buying interest. If Cardano can rebound from this point, the cryptocurrency may bounce back and break through the resistance level of $0.417, reinforcing the analyst's bullish outlook while suggesting higher resistance targets.
Market experts revealed that when Cardano breaks the resistance level of $0.417, its current market structure may undergo a significant transformation. It is worth noting that Cardano has seen slow growth and lackluster market performance in recent years.
Due to the lackluster performance and weak momentum of cryptocurrency prices, many investors had previously expressed dissatisfaction, with some calling ADA a 'dead coin' and others labeling Cardano as a 'ghost chain.' However, recently Cardano has been on a bullish trajectory as its price has experienced significant rises over the past few weeks.
According to data from CoinmarketCap, Cardano is trading at $0.434, having risen 17.29% in the past 24 hours and 27.84% over the past week. The daily trading volume of the cryptocurrency has also increased by over 65%, highlighting renewed interest and confidence from investors in this altcoin.
If ADA fails to hold the key support level, there may be risks.
TheCryptoParadise revealed on TradingView the potential downside risks if Cardano fails to maintain the aforementioned key support level (around $0.313). The analyst emphasized that if Cardano's price cannot stay above $0.313, it may significantly drop to the key support level between $0.274 and $0.290.
This support area is an important price bottom where buyers can step in to prevent further price declines. He also emphasized that ADA needs to reclaim the support level of $0.313 to maintain a bullish outlook. However, if the daily closing price is below $0.274, it is likely to invalidate this bullish scenario, thereby increasing the risk of further price declines, possibly even reaching new lows.
