- ADA/USD teases a head-and-shoulders breakdown on the 4H chart.
- The Cardano price risks a sharp drop towards Wednesday’s low of $0.95.
- RSI has room to drop further, as ADA bears sustain below 200-SMA.
Cardano (ADA/USD) is falling for the second straight day on Friday, resuming this week’s bearish streak following Thursday’s temporary reversal.
The fifth most widely traded cryptocurrency is looking to retest the $1 mark, as the crypto space remains in a sea of red after China intensified its crackdown on cryptocurrencies.
Cardano is down nearly 40% from its all-time highs recorded at $2.4652 a week ago.
ADA/USD: Poised for another sell-off on a sustained breach of this key support
As observed on Cardano’s four-hour chart, Friday’s sell-off received additional impetus after the 21-simple moving average (SMA) pierced the 100-SMA from above, representing a bearish crossover.
The recent volatile price action has carved out a head-and-shoulders (H&S) formation, with the ADA bears on the verge of confirming a pattern breakdown.
The ADA price awaits a four-hourly candlestick closing below the H&S neckline at $1.4549, which would open doors towards the pattern target measured at $0.95. Wednesday’s flash crash low coincides at that level.
The sellers have found acceptance below the critical 200-SMA at $1.5339, adding credence to a potential move lower while the Relative Strength Index (RSI) looks south towards 30.00.
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ADA/USD: Four-hour chart
On the flip side, the pattern neckline support now resistance could offer initial resistance, above which the 200-SMA will get retested.
A sustained break above the latter could re-ignite the recovery towards the downward-pointing 21-SMA at $1.6741.
Ahead of that, the ADA bulls need to scale the $1.50 psychological level convincingly.
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