Cardano Price Prediction: ADA sets stage for 10% correction

Cardano price shows the formation of a setup that hints at a breakdown. The resistance level present above the current position adds credence to this drop.

Cardano price on the verge of a downswing

Cardano price has been setting up higher highs and higher lows since May 28. A rising wedge pattern appears to form when these swing points are connected using trend lines. Such a converging price action for ADA tends to result in a violent drop after a decisive close below the lower trend.

As such, the technical formation forecasts a 16% downswing, obtained by measuring the distance between the first swing high and low. Adding this measure to the breakout point at $1.725 places Cardano price at $1.448.

While a 16% correction seems plausible from a theoretical perspective, the presence of the demand zone, ranging from $1.488 to $1.566, might stunt this drop.

Hence, investors can expect a 10% drop to $1.566 or a sweep into this zone. Only in extremely bearish scenarios, ADA price might break below the said support area and head toward the theoretical target point at $1.448

ADA/USD 4-hour chart

While the bearish descent seems to be fixed due to a rising wedge, investors should note that this pattern is formed on an uptrend. Therefore, a sudden spike in potential buying pressure could tilt the odds in the bulls’ favor.

The stiff resistance level at $1.833 has prevented Cardano price from moving higher for nearly two weeks. Hence, a decisive close above $1.852 will invalidate the bearish narrative detailed above and kick-start a bullish outlook.

In this case, ADA price might rally 10% to tag the resistance level at $2.037.