The price of Cardano (ADA) has developed bullish divergences following a 74% drop from its all-time high.

Since hitting an all-time high on September 2 of $3.10, the ADA price has been declining.

Conclusion

  • MACD and RSI daily divergences are positive.
  • There is a chance that ADA has finished wave A of a three-wave corrective structure that it is working on.
  • This might be a short-term bullish pattern for Cardano (ADA).

 On February 24, the price hit a low of $0.745 as a result of the decline. As of this writing, the price of the ADA has yet to begin an upward trend.

At this point, ADA has dropped by 74% from its all-time high. In addition, a downward resistance line is being followed by the price.

ada
Source: Tradingview

Potential reversal of the ADA

RSI and MACD divergences on the daily time-frame are clearly positive (green lines). Predicted bullish trend reversals are typically preceded by such large bullish divergences.

If the line is broken, the nearest region of resistance is at $1.64. 0.382 Fib retracement resistance and a horizontal resistance region are present here.

ada

As can be seen on the six-hour chart, there may be evidence that the stock is now trading inside a falling wedge pattern. This is a bullish pattern, which increases the likelihood of a breakout.

A breakout would likely occur after a new low had been established, which would validate the wedge's lower end once again before it finally broke out.

ada
Source: TradingView

Analyzing the number of waves

@CryptoTony_, a cryptocurrency trader, posted a chart of the ADA token and said that it had reached the end of its first leg of the corrective rally.

An A-B-C corrective structure is likely what has been occurring since the all-time high in ADA's price (black). The number of sub-waves is shown in red.

Sub-wave five may have terminated, although that has yet to be determined. Once again, this would reaffirm the wedge's support line.

However, a break-out appears to be imminent. This would also be consistent with the daily bullish divergences that have formed.

Looking back to March 2020's movement, the price of ADA has reached the 0.786 Fib support level at $0.68.

There is a good chance the wedge will continue to fall until it reaches its support line.

** Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of USA GAG nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

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