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The Cardano price action has remained below the $1 mark in light of the corrections over the past seven days. This correction, which played out across the crypto industry, pushed Cardano back below the $1 mark on 18% of December.
Although the broader trend points to a possible move on the weekly time frame towards a new all-time high (ATH), recent technical analysis on TradingView has opened the possibility of a continued correction towards $0.43 before another strong upward move.
Current price movements highlight resistance and cooling off period
According to technical analysis of the Cardano (ADA) price action on the weekly candlestick timeframe, the cryptocurrency has encountered notable resistance around $1.2046. This resistance arose afterwards Cardano’s remarkable 205% increase from $0.4322 at the end of October to $1.32 at the end of November.
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Interestingly, this notable price increase caused Cardano to reach significant lows that serve as support levels for the price. Furthermore, the rally ended with Cardano entering the overbought zone on the Relative Strength Index (RSI) indicator. The rally culminated in Cardano price peaking at 82.87 on the RSI, but has since returned to a cool-off/correction period where buying pressure is consolidating at the time of writing.
Cardano’s consolidation has opened up prospects for the next direction, with significant buying volumes observed during recent trading sessions.
A deep correction could test critical support at $0.43
While the long-term outlook remains bullish, the analysis highlights the scenario of a deep correction that could further push Cardano price lower in the short term. With this in mind, the analyst points to support levels that ADA may revisit in the event of a deeper correction. The first key level at $0.7683 has already proven its significance and acts as a reactionary zone in recent price movements.
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Below that, $0.4322 represents the ultimate support for the current bullish leg. What this means is that ADA must remain above the USD 0.43 support level for a bullish trajectory to remain valid. Failure to sustain above $0.43 at this point will likely lead to further price declines and a change in bearish outlook.
The analyst also identifies $0.3166 and $0.2427 as primary supports. These levels represent Cardano’s lowest support during the previous bear market and are less likely to be breached in the event of a longer-term decline.
Despite the potential for a deep correction, Cardano’s recent market behavior and purchasing trends suggest one promising long-term prospects. At the time of writing, ADA is trading at $0.912 and is up 2% in the last 24 hours. Once the current resistance at $1.2046 is cleared, ADA is well positioned to challenge its all-time high of $3.09 and possibly set new highs in the current cycle.
Featured image created with Dall.E, chart from Tradingview.com
