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Approaching the bottleneck area of a triangle pattern, will Cardano give a breakout rally to hold $0.32 support?
Over the last ten days, the increased bearish influence over Cardano resulted in seven red candles, two Dojis, and a single bullish candle. The bear cycle accounts for a fall of 15.74% last week and ends the month of August with an 11% fall. Will the ongoing bearish trend in Cardano trigger a fall to under $0.30?
Cardano Downfall Forms a Triangle
In the 4-hour chart, the bear cycle forms a resistance trendline, highlighting multiple failed bullish reversals in Cardano. Further, the high momentum puts additional stress over the $0.32 support level, with a breakdown warning.
The ADA price action reveals a long-coming support trendline in motion. In addition to the resistance trendline, it completes a triangle pattern, and the altcoin approaches the bottleneck part.
As the bullish momentum fails to break above $0.40, the 50 and 200 EMAs in the 4-hour chart give a failed golden crossover. The reversal rally fuels the downtrend in the 50 and 200 EMAs following the Death Cross.
Furthermore, the 4-hour RSI line lacks a divergence to support the bullish side. However, the oversold nature reflects a high possibility of a bullish reversal cycle.
Will Bulls Comeback For a Truly Decentralized Network?
On Sunday, the Chang upgrade went live over the Cardano blockchain, making it a truly decentralized network. With the upgrade, the decision-making power has now shifted to the ADA holders. They can do so by selecting governance reps and voting proposals.
Cardano Improvement Proposal 1694 (CIP-1692) brings forth three user-led governance bodies: the Constitutional Committee, Stake Pool Operators, and Delegate Representatives.
Shifting power from the founding entities, including the Cardano Foundation, these groups no longer have the power to trigger chain upgrades or “hard forks.”
With the new upgrade, Cardano is trending in the market, but the ADA price fails to reflect the sentiment improvement.
Will Cardano Break Under $0.32?
As the bear cycle in Cardano gains momentum, the broader market correction issues a CRASH warning. Furthermore, as the CIP-1694 upgrade failed to boost the altcoin’s price, it may soon test the $0.32 level.
The lack of bullish divergence and the growing bearish influence show increased breakdown chances. In such a case, the next support levels are at $0.295 and $0.276.
In case of an unlikely breakout rally, the resistance levels are at $0.35 and $0.364, as potential profit booking levels.