2021-12-12 03:56:12

ADA forms bearish pattern hinting at 21% nosedive

  • Cardano price has been unable to rectify the prevailing downtrend since early September.
  • A new chart pattern suggests additional losses are to be expected for ADA.
  • Cardano must hold above $1.18 to void the bearish outlook.

Cardano price has failed to galvanize investors’ enthusiasm as it continues to record lower highs. The prevailing downtrend suggests that recovery would be challenging for ADA. The Ethereum killer is starting to form a chart pattern that suggests a bearish forecast for the token. 

Cardano price reveals pessimistic forecast

Cardano price is forming a descending triangle pattern on the 4-hour chart, as ADA has registered lower highs. The governing technical pattern indicates a pessimistic outlook, with a bearish target of a 21% descent. 

Investors should note that Cardano price may continue to bounce within the prevailing chart pattern before a decisive move is made, slicing through the confines of the triangle. If ADA breaks below the lower boundary of the governing technical pattern at $1.18, the bulls could be eyeing a 21% decline toward $0.93.

However, Cardano price may discover immediate support at the 50 four-hour Simple Moving Average (SMA) at $1.35, then at the 21 four-hour SMA at $1.30, intersecting with the 78.6% Fibonacci retracement level. 

If ADA loses the aforementioned line of defense, Cardano price may drop lower, targeting the July 28 low at $1.25, then at the June 21 low at $1.00. Only a massive sell-off with a significant increase in sell orders would see the token reach the bearish target at $0.93, a level not seen since April 22.

ADA/USDT 4-hour chart

Cardano price could aim to escape the downtrend by breaking above the upper boundary of the triangle at $1.41. However, another line of resistance may appear at the 50% retracement level at $1.47, coinciding with the 100 four-hour SMA.

Additional hurdles may emerge at the 38.2% Fibonacci retracement level at $1.53, then at the 23.6% Fibonacci retracement level at $1.62 before Cardano price faces further resistance at the 200 four-hour SMA at $1.70.

 

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