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Cardano is forming a potential morning star pattern, increasing the chances of a bounce back to $0.73. Is this the start of a new bullish rally?
While the crypto market remains uncertain, Cardano is holding steady at $0.60. After recently dipping from $0.6296, Cardano is now trading at $0.6724.
The formation of a potential morning star pattern and an intraday recovery suggest that Cardano may retest the $0.73 resistance level. Could this lead to a breakout toward the $0.92 mark?
Cardano Price Analysis: Teasing a Bounce Back to $0.73
On the daily chart, Cardano’s price trend recently failed to overcome the 200-day EMA, leading to three consecutive bearish candles and a 10% decline over the past weekend.
However, the downturn took a quick bullish turn as a Doji candle formed, signaling lower price reactions from the $0.60 mark. This level coincides with the 50% Fibonacci retracement, highlighting a key support area for Cardano.
Currently, Cardano is extending the bullish turnaround with an intraday recovery, forming a bullish candle and indicating the potential formation of a morning star pattern. With this sudden reversal, Cardano will likely retest the short-term crucial resistance at the 61.80% Fibonacci level.
Additionally, the 200-day EMA line is moving closer to the resistance level. Amid the recent surge in bearish sentiment, the 50- and 200-day EMA lines are on the verge of a “death crossover,” which could trigger a major sell signal for Cardano.
Moreover, the MACD and signal lines have recently shown a negative crossover during the weekend’s pullback.
Analyst Warns of Major Downside Risk
Ali Martinez, a crypto analyst, highlights the recent pullback in Cardano as a potential precursor to a major breakdown. He points to the critical support zone between $0.70 and $0.80 as key.
With the recent breakdown, Martinez warns of a significant downside risk if Cardano fails to reclaim the support level soon. Based on previous declines from this crucial support area, the correction could extend to the $0.31 to $0.24 range.
Cardano Price Targets
Based on the recent price action, the lower price rejection suggests a potential retest of the 61.80% Fibonacci level at $0.73. This implies an upside potential of 8.52%.
Optimistically, a breakout could push the price toward the 78.60% Fibonacci level, with the next target at $0.93.
On the flip side, a close below the 50% level could test the local support trendline near $0.53, representing a potential downside risk of nearly 20%.