ADA approaches critical support floor, reversal likely

  • Cardano price has sliced through the $1.25 support level as the cryptocurrency market took a tumble.
  • Before reversing, ADA is likely to dip into the demand zone ranging from $1.156 to $1.196.
  • An inability of the buyers to reclaim $1.156 after a breakdown will invalidate the bullish thesis.

Cardano price has been on a steady downtrend since July 5, and this sell-off could be coming to an end. Although indecisive, a bounce from a crucial demand zone seems likely to kick-start an uptrend.

Cardano price awaits a trigger

Cardano price has dropped roughly 19% since setting up a swing high at $1.495 on July 5. As ADA trades around $1.227, it could reverse from the current position and head higher or dip into the support area extending from $1.156 to $1.196. Regardless of where it starts, an uptrend seems likely due to the market structure of Bitcoin.

Therefore, investors can expect a resurgence of buyers that will break through the immediate resistance barrier at $1.251, followed by the demand zone stretching from $1.287 to $1.318.

A decisive 4-hour candlestick close above $1.318 will confirm a shift in momentum in favor of the bulls. In such a case, Cardano price might extend the uptrend to tag the resistance level at $1.373 and, in a highly bullish case, $1.440.

If the buying pressure persists after reclaiming $1.440, ADA might climb to $1.495.

ADA/USDT 4-hour chart

While the optimistic scenario seems logical, a potential spike in selling pressure that slices through the immediate support area, ranging from $1.156 to $1.196, will denote weakness in buyers.

A decisive 4-hour candlestick close below $1.156 will invalidate the bullish thesis and confirm the start of a downtrend that could extend to $1.107.

 

This news is republished from another source. You can check the original article here

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