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What Could Happen as Cardano Fails to Reach Descending Channel Resistance

thecryptobasic.com 2 h

Analytics

Cardano has failed to reclaim higher resistance levels as weak momentum persists, potentially paving the way for further price declines.

Cardano trades within a descending channel and has repeatedly made lower highs and lower lows. After dropping to the structure’s lower support level following its February 6 crash to multi-year lows, the coin has yet to show recovery signs.

Key Points

Cardano has failed to reclaim higher resistance levels as weak momentum persists, potentially paving the way for further price declines.
Technical analysis points to repeated lower-high rejections for $ADA in the channel, dating back to the early November high of $0.6069.
The momentum remains bearish after dropping to $0.22, as it has not shown the strength to even reclaim the descending resistance zone.
Unless conditions change, $ADA might decline further to the $0.220 lows.

Cardano Looks Bearish

Technical analysis points to repeated lower-high rejections for $ADA in the channel, dating back to the early November high of $0.6069. The cryptocurrency has seen its price action contained within the channel as it slides consistently to lower prices.

Recently, Cardano dropped to the channel’s support at $0.220 last week before rebounding slightly. The momentum remains bearish, as it has not shown the strength to even reclaim the descending resistance zone.

Cardano Descending Channel

Unless conditions change, $ADA might decline further. Analysis suggests that support at $0.22 remains a key level to watch if the coin slides further. The move would culminate in a 16% correction from the current price of $0.262.

However, if Cardano regains momentum from here, it could retest the channel’s upper resistance. A breakout makes things a bit more interesting and sets it on course to reclaim the $0.34 resistance level. Holding here invalidates bearish scenarios for $ADA.

Good Entry for Long Positions

A separate analysis still aligns with a bearish bias for Cardano in its current state, but remains optimistic. Specifically, $ADA could drop below the $0.25 area to grab liquidity and could rebound if it shows a reaction from there.

Under these circumstances, $0.25 would be an optimal entry point for a long position, as $ADA would complete a double bottom if the rebound materializes. This could push the coin toward $0.30, above which there is more liquidity to capture.

Cardano Targets Liquidity at $0.25

Notably, data from Coinglass supports this. At $0.25, there would be a large-scale long liquidation on the $ADA/BTC chart on Binance, with up to $424,350 at risk of being wiped out. The next area on the chart with such dense leverage liquidation value is at $0.28, where $735,890 worth of shorts would be forced to exit the market.