What next for ADA after a 7% daily drop below $1?

Cardano recently started a strong bullish move, retrieving its yearly high of $0.8 and advancing to the critical resistance zone of $1.3.

However, the market is expected to enter a consolidation phase, with price fluctuations between $0.8 and $1.3.

Technical Analysis

By Shayan

The weekly chart

Cardano has recently seen increased buying pressure, recovering from the critical $0.3 support zone. This bullish momentum allowed ADA to recover its previous annual high of $0.8 and reach the significant resistance level of $1.3. However, the $1.3 threshold remains a decisive barrier, with sellers exerting considerable influence, leading to a recent rejection.

In the medium term, ADA will likely go through a pullback phase, possibly returning to the broken $0.8 level before resuming its upward trajectory. A successful bounce from this support could set the stage for a renewed rally, targeting the crucial $2 resistance zone and signaling the continuation of a long-term uptrend.

The 4 hour chart

On the 4-hour chart, Cardano’s bullish momentum has waned after finding resistance at the $1.3 level, highlighting significant selling activity. This led to increased volatility and sideways consolidation around this critical zone.

During this consolidation phase, a bearish reversal pattern was formed for the head and shoulders, with the price now teetering near the neckline of the pattern. A confirmed break below this low could trigger a near-term correction, with the asset possibly retracing to Fibonacci levels of 0.5 ($0.82) to 0.618 ($0.7).

This corrective move could allow buyers to re-enter the market, potentially fueling the next rally aimed at regaining the $1.3 resistance and setting the stage for further upward momentum.

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