The price of Cardano is consolidating between two converging trend lines, indicating that a volatile move is imminent.
An uptrend is confirmed by a decisive 4-hour candlestick close over $1.40, but a collapse of $1.20 signals a new downturn.
ADA is projected to fall further, sweep the swing lows at $1.20, and then rise.
Cardano’s price has been on a downward trend since June 3, with no significant higher highs, implying that the bears are in control of the market. ADA consolidates between two converging trend lines and anticipates a huge breakout as it trades within a tight range.
Until mid-June, the Cardano price was trading above the 50% Fibonacci retracement line at $1.47. This changed on June 18, when ADA fell below it. Cardano’s price action has been in the form of lower highs and higher lows since then, indicating that the range is tightening.
Typically, large-scale development like this leads to enormous shifts.
While the typical breakout looks for the altcoin to cut through the inclined/declined trend lines, investors should focus on the immediate swing points to see where ADA is headed.
If the Cardano price falls below $1.24, the support level will be reached. If selling pressure continues to grow, ADA may be able to break through the $1.20 lows. This downswing is gathering liquidity, which is a telling sign that an upswing is about to begin.
As a result, investors should expect a 10% correction and a $1.20 sweep, followed by a 16 percent upswing that retests the $1.40 resistance level. If this level is breached, the 50 percent Fibonacci retracement level at $1.47 could be tested again.
4-hour chart of ADA/USDT
If Cardano fails to rise over $1.20, the bullish thesis outlined above will be jeopardized. This indicates that the sellers are in control and are absorbing the purchasing pressure.
In this instance, ADA is likely to test the subsequent swing low of $1.11, which was established on June 23. If this barrier is breached, the bullish narrative will be debunked, and a downturn will begin, perhaps pushing Cardano price to the range low of $1.
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