June 8, 2023

The Cardano (ADA) price has broken out from a short-term diagonal resistance but has yet to reclaim the main resistance area at $0.33.

Cardano’s founder, Charles Hoskinson, made news by stating that algorithmic stablecoins are essential for the long-term health of Bitcoin. The most prominent was Terra’s UST, which at its peak was a top three stablecoin. However, a death spiral caused it to lose its peg and led to its eventual demise. The Cardano blockchain platform has launched its own stablecoin, Djed, which has so far maintained its peg.

Cardano (ADA) Reaches Make-or-Break Level

The Cardano price has fallen since Feb. 16, when it validated an ascending support line as resistance (red icon). The decrease led to a low of $0.298 on March 8. While the ADA price has increased since, it is still trading inside the $0.33 resistance area. This area is crucial since it previously provided support and coincided with the 0.5 Fib retracement support level (red circle). Therefore, whether the price gets rejected from it or reclaims it instead could determine the future trend. 

In case of a rejection, a fall to $0.25 could follow. On the other hand, if the ADA price reclaims the area, it could increase toward its highs at $0.40. 

The daily RSI is leaning bearish, since it is still 50 even though it is moving upwards. Therefore, a rejection is slightly more likely.

Cardano (ADA) Price Range
ADA/USDT Daily Chart. Source: TradingView

Cardano (ADA) Breaks out From Short-Term Resistance

The technical analysis from the short-term six-hour chart shows that the price broke out from a descending resistance line. Therefore, it is likely that it has begun a short-term upward movement. If this is the case, the ADA price will reclaim the $0.33 resistance area. Then, the most likely future movement would be an increase to the 0.5-0.618 Fib retracement resistance level at $0.360-$0.374. 

The six-hour RSI supports this development since it has moved above 50. 

On the other hand, a fall below the descending resistance line would invalidate this bullish forecast. In that case, the ADA price could fall to $0.25. 

Cardano (ADA) price Short-Term Movement
ADA/USDT Six-Hour Chart. Source: TradingView

To conclude, the most likely ADA price forecast is an increase to the 0.5-0.618 Fib retracement resistance levels at $0.360-$0.375. This bullish outlook would be negated by a decrease below the descending resistance line, which could trigger a fall toward $0.25.

For BeInCrypto’s latest crypto market analysis, click here.


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