Cardano has been trading within a descending triangle since late April, with the cryptocurrency recently bouncing off a critical support level at $0.6695.
Currently trading at $0.6810, ADA/USD is showing signs of a short-term recovery, but remains vulnerable to continued bearish pressure within the prevailing downtrend.
The most notable feature on Cardano’s chart is the well-defined descending triangle that has capped price action over the past two weeks. The upper boundary of this channel has consistently rejected bullish advances, with the lower support around $0.6695 providing a floor for the price action.
Cardano Price Structure
Cardano recently tested this crucial support level, which has held firm on two occasions since late April. The bounce from this zone suggests that buyers are defending this territory, though the recovery appears tentative at best.
For a more convincing bullish scenario to emerge, Cardano would need to break above the descending trendline resistance currently situated around $0.7100.
The current price action shows signs of a potential double bottom formation at the $0.6695 support level, which could signal a reversal if confirmed by a decisive break above the pattern’s neckline. However, the descending moving averages suggest that bearish momentum remains dominant in the near term.
Both the 100 SMA and 200 SMA are pointing downward, with the 100 SMA trading below the 200 SMA since early May. This bearish crossover indicates that the path of least resistance is to the downside. The moving averages are currently positioned around $0.7000-$0.7050, potentially serving as dynamic resistance levels should the price attempt to recover further.
Cardano Trading Opportunities
The stochastic oscillator is showing an interesting development, having recently moved upward from oversold territory. This suggests a potential shift in short-term momentum to the upside. The oscillator is still below the 50 level but showing a positive trajectory, which could support further near-term gains.
Meanwhile, the MACD indicator in the middle panel appears to be flattening after a period of decline, potentially signaling a slowdown in bearish momentum. However, both the MACD line and signal line remain below the zero level, indicating that the broader bearish sentiment still prevails.
The recent price action suggests two potential scenarios: a continuation of the bearish trend if the price fails to break above the descending channel, or a reversal if Cardano can establish a foothold above the moving averages and the channel resistance.
Risk-averse traders might prefer to wait for confirmation of either scenario before committing to positions. A break below $0.6695 would likely trigger a move toward the $0.6500 level, while a decisive break above the channel resistance and the 200 SMA could target the $0.7200-$0.7300 zone.
From a fundamental perspective, Cardano continues to develop its ecosystem, with several projects launching on its platform. However, the broader cryptocurrency market sentiment has been cautious amid uncertainty surrounding regulatory developments and macroeconomic factors.
