Which Way Will The Cardano Price Go in February 2024—$0.7 or $0.4?

The Cardano (ADA) price is currently undergoing a constructive pullback, influenced by the presence of a pennant pattern.

Source: coingape.com

Aligned with the recent positive trend in the broader cryptocurrency market, Cardano has experienced a notable recovery from the $0.46 level. This turnaround from the local support has contributed to a 12% surge in ADA's value over the last five days, reaching an approximate trading price of $0.519. However, the ongoing upward movement is facing resistance at the trendline of the pennant pattern, presenting a potential risk of an extended correction if ADA fails to break through this resistance level.

The resilience of ADA's recent rebound and its ability to overcome the resistance will likely play a crucial role in determining the continuation of the uptrend. Investors are closely monitoring the price action and pattern dynamics to assess whether Cardano can sustain its positive momentum in the face of the resistance challenge.

Final Retraction Before ADA Crosses The $0.7 Mark

The ADA coin has demonstrated resilience by rebounding three times from each side of the converging trendline, emphasizing the robust influence of the pennant pattern on its price movement. The 50% price retracement indicates that buyers maintain a strong hold on the asset. Intraday trading volume for ADA stands at $552 million, reflecting a notable 61% gain.

As the primary cryptocurrency of the Cardano ecosystem, ADA has witnessed a downward trend over the past month, experiencing a decline from $0.677 to its current trading level of $0.51, marking a 23% decrease. A detailed analysis of the daily chart reveals a structured correction within two converging trendlines, characteristic of a pennant pattern. Typically observed in technical analysis, this pattern signifies a consolidation phase following a significant rally, providing buyers with an opportunity to regroup for a potential upward movement.

The successful breakthrough of the upper boundary of the pennant pattern could establish a robust foundation for buyers to resume the upward trend. Conversely, the recent 1.35% drop in ADA's price from the upper trendline suggests ongoing pressure from sellers at higher levels. If this trend persists, ADA might face an additional 18% decline, potentially reaching the lower trendline around $0.42.

From Technical Analysis Notes

The Relative Strength Index (RSI) slope, hovering at 50%, indicates a neutral market sentiment for this asset. The Exponential Moving Average (EMA) highlights a bullish long-term trend, with the coin price trading above the 100-and-200-day EMAs. Recent days have witnessed significant price fluctuations in major alternative coins, reflecting a mixed market sentiment. A tug-of-war between bearish and bullish forces is evident, with the current advantage leaning towards the bears, leading to the decline in Cardano's value.

If market momentum weakens, ADA's price may experience a decline, potentially testing the $0.45 support level. In a market dominated by bears, ADA could face a more substantial drop, potentially reaching down to test a lower support threshold of $0.40 in the near future. The daily candlestick features a noticeable long-tail rejection, signaling strong buying interest at this lower support level.

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