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Cardano (ADA) has been in a downtrend since reaching its all-time high on September 2nd, and has practically swayed below its 20-50 EMA. The decline proved to be quite dangerous for the bulls, as they were unable to defend the $1 mark.
A close above $0.9 would put ADA in position for a possible retest of its Point of Control (POC). Following that, it may experience a pullback from near the $1.1-zone and revert to its long-term trend. The seventh-largest cryptocurrency is most likely positioned to reclaim the critical $1-support (now resistance). It was trading at $0.888 at press time, down 1.2 percent in the previous 24 hours.
ADA Daily Chart
ADA has formed a six-month-long descending channel (reversal pattern, yellow) since its ATH, while the alt was in a steep downtrend. Furthermore, it has lost more than 40% of its value since February 10th, after forming a bearish flag and pole on its daily chart.
As a result, it fell to a 9-month low on February 24th, while buyers stepped in to defend the $0.82 level. It is critical to note that this level of support has been used as a testing ground for nearly a year. As a result, the bulls have been exerting pressure and rejecting lower prices for the past two days.
From here, assuming the bulls want to keep the $0.82-mark intact, the alt is looking for a retest of the 20-EMA, followed by a reclaim of the $1-support. Historically, ADA has risen from the lower trendline of the down-channel and tested its 50-day moving average before returning to the downtrend. However, the next few candlesticks would reveal whether or not history would repeat itself.
The bearish RSI recovered from its oversold level, as expected. Any close above the 38-point mark would almost certainly result in a retest at the 44-point mark. As the bulls attempted to topple these barriers, a recovery towards the midline appeared possible in the days ahead.
The DMI confirmed the increased bearish influence. The -DI is approaching its long-term peak, so the chances of a recovery in the coming days are good.
While a trend reversal may still necessitate extraordinary efforts on the part of bulls, a test of its Point of Control while closing above the 20 EMA appeared likely in the medium term. Nonetheless, traders/investors should keep a close eye on Bitcoin's movement, as ADA has a 71% 30-Day correlation with the king coin.
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