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Cardano price faces bearish continuation to $0.50, even $0.42

www.fxstreet.com 19 May 2022 07:46, UTC
Reading time: ~2 m

  • Cardano price action resumes the prior downtrend.
  • A bearish continuation pattern and rejected bullish reversal pattern signal further downside momentum.
  • Upside potential is increasingly unlikely but not improbable.  

Cardano price action shows continued bearish selling pressure towards the $0.50 value area. ADA did close above a key Ichimoku level on Tuesday, but follow-through by bulls never happened.

Cardano price is at risk of dropping lower as participation fizzles out

Cardano price may be at risk of further downside pressure due to decreased participation. While massive inflows of buyers and sellers occur between May 9 and May 13, the volume has dropped significantly since then.

Looking at the current pattern developing on the daily Ichimoku chart, it’s not hard to see why. Two important chart patterns were developing on the daily chart. The first is a symmetrical triangle. As with any triangle pattern, one of the common behaviors that analysts and traders should expect is a drop in volume the closer price gets to the apex of the triangle.

The second pattern is a candlestick pattern known as a Bullish Squeeze Alert. The Bullish Squeeze Alert pattern is a three-bar pattern, with the second candlestick as an inside bar of the first candlestick, and the third candlestick as an inside bar of the second candlestick. The primary rule is that the first candlestick of the pattern must be a down day. This pattern, however, was busted in the early AM session, likely creating some trapped bulls anticipating further daily consolidation.

ADA/USD Daily Ichimoku Kinko Hyo Chart

Downside risks remain a major concern. Cardano price remains overwhelmingly bearish within the Ichimoku Kinko Hyo System. If there is a daily close that returns ADA below the Tenkan-Sen, then the move for bears is to push Cardano price to the 88.6% Fibonacci retracement at $0.42.

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