Cardano Price Prediction: ADA eyes 13% drop before heading to swing highs
|- Cardano price shows a slowdown around a crucial supply barrier that ranges from $1.33 to $1.26.
- A 13% retracement to $1.14 would allow the buyers to purchase ADA at a discount for the next leg up.
- If buyers produce a sustained yet decisive close above $1.35, an upswing to $1.48 could ensue.
Cardano price shows the exhaustion of buying pressure as it tries to break out of an area of resistance. A failure to do so will most likely result in a pullback.
Cardano price at inflection point
On the 12-hour chart, Cardano price has tried breaching the supply zone’s upper trend line at $1.33 for more than a day. However, sellers in this area have prevented this, leading to a consolidation here.
This indecisiveness might lead to more sideways movement in ADA, at least until one side overwhelms the other. If ADA slices through the 50% Fibonacci retracement level at $1.26, which coincides with the supply barrier’s lower trend line, it will signal the start of a new downtrend.
Under these conditions, investors can expect a pullback to $1.14, which is approximately 13% lower than the current price.
In some cases, this correction could extend up to $1.11.
This move would allow buyers to scoop up the so-called “Ethereum killer” at a discount, pushing the price higher. Hence, a reversal scenario could play out after a 13% to 15% drop.
ADA/USDT 12-hour chart
According to IntoTheBlock’s Global In/Out of the Money (GIOM) model, the support levels are stacked below the current Cardano price levels. Hence, a downswing is most likely to be short-lived. Therefore, the bias for ADA is bullish.
Adding credence to this bullish thesis is the presence of only one significant resistance level at $1.44. Here, roughly 76,000 addresses purchased nearly 989 million ADA and might dampen the upswing.
Therefore, clearing this level will provide Cardano price a clear path to retest current all-time highs at $1.5584.
ADA GIOM chart
On the flip side, if the $1.11 support level breaks down and Cardano price spends an extended period below this level, buyers would lose their leverage. Such events could shift the winds toward sellers, leading to a 7% sell-off to the swing low at $1.03.
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. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. 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 FXStreet nor its advertisers.