Cardano price increases risk of sharp decline as ADA support weakens

Cardano price is gaining traction as a bullish candlestick pattern signals a potential of a reversal in the downtrend. The price has already achieved a 38.2% corrective rebound, and now it's continuing north. Despite the bullish signs ADA price remains at risk if the market fails to slice through major resistance.  

Cardano price completes 50% Fibonacci retracement

Cardano price started a fresh recovery from the $1.58 support zone to trade at $1.74. The formation of a Doji candle signals a lessening in selling pressure and marked the beginning of a rebound. The RSI and Stochastic indicators have fallen to the oversold zone, signaling investors will probably jump into the market to buy cheaper ADA tokens. 

ADA coin has already completed a 38.2% Fibonacci retracement at the $1.74 mark, and now it's consolidating under the 50% Fibo level at $1.77. There's also a crucial downward trend line forming on the 12-hour chart, which is acting as a major hurdle at $1.77, giving bulls a hard time. 

Cardano seems to be forming a bullish engulfing candle on the 12-hour chart while the RSI and stochastic have started coming out of the oversold zone. These technical tools indicate a potential upswing is in progress. Thus, a spike in demand could help ADA to penetrate through $1.77 and complete a 61.8% Fibonacci retracement at $1.81. Continuation of the uptrend can see ADA price reach to the 78.6% Fibo level at $1.87.   

 Cardano 12-hourly chart - Fibonacci retracement in play

At the moment, the sixth-largest cryptocurrency by market cap is trading with a slight bullish bias. ADA has formed a Doji, followed by a hammer candle, signaling a bullish reversal. It is worth noting that a rejection from the $1.77 level could open further room for selling until the 38.2% or 23.6% Fibonacci retracement levels at $1.72 or $1.66, respectively. Breaching this support level might extend the downtrend until $1.59.