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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.
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.
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.
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.
$ADA / $USD - Update
— Crypto Tony (@CryptoTony__) March 13, 2022
C wave drop will depend on the A wave bottom, so for now I have mapped out the C wave as possible bottoms ..
Will be looking the A wave low, once confirmed pic.twitter.com/IRQw44XoSo
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.
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