Cardano (ADA) – Developing in a descending trianglePosted on Sunday, December 19 2021 at 10:05 pm GMT+0000
Since its plunge to a new 4-month low of 1.187 on December 4th, Cardano (ADA) has been trading sideways developing a descending triangle on the four-hour chart. The relatively low trading volume revealed over the past couple of weeks is ratifying this neutral phase.
Technically, such a pattern usually gets dissolved on the downside, and could hence be followed by a fresh sell-off confirming the resumption of the broad downtrend.
What endorses that view is the current rejection from the triangle’s surface, which raised odds for a bearish breakout. Furthermore, signals from momentum indicators are currently discouraging. The RSI dipped below its neutral threshold, while the stochastic oscillator shifted south from overbought levels.
Thus, a close below the triangle, accompanied with a notable jump in trading volume, should power selling pressures towards the 1.000 mark. alternatively, the downfall could extend further to reach the 0.880 level, the initial target of the formation.
To the upside, a decisive move above the triangle’s descending line, currently seen around 1.300, will bolster buying forces towards 1.412-1.480 region formed by the December 12th and 7th high respectively. However, in this scenario, the price should likely seal towards the 1.615 level.
All in all, Cardano is looking indecisive at the current phase, and traders should wait for a decisive move above or below the triangle to adjust their exposure accordingly.