Will price consolidate or fall further?

After jumping approximately 10% on Wednesday (20), the price of Cardano (ADA) fell again today.

The 9th largest cryptocurrency in the world by market value has been moving discreetly, after experiencing strong volatility in recent days. ADA, which started the week at US$0.68, fell 16% and formed a low at US$0.56.

The token made a strong jump after this bottom, but it didn’t take long to fall again. Therefore, technical analysis can help define which way Cardano will go from now on.

Cardano begins consolidation pattern

Analysis of the daily chart shows that Cardano entered a sharp decline after forming a top at $0.81 on March 14. Since then, its price has fallen by approximately 30%.

The top was formed very close to the March 4th high, which could categorize this movement as a double top pattern. As it is one of the most significant trend reversal patterns, the ADA price was already expected to fall.

However, the decline stopped at $0.57, with the altcoin beginning to bounce after this low. This had already occurred on March 5th, thus creating a double bottom – a reversal pattern for an uptrend.

Therefore, it can be said that ADA is in a consolidation between the price levels of US$0.57 and US$0.81 (yellow rectangle).

At the close of the article, the altcoin was trading at US$0.63, being at the low end of this rectangle. Therefore, a break of support from this consolidation pattern is more likely.

Read more: Best cryptocurrencies to day trade in March 2024

Price prediction

Fernando Pereira, an analyst at Bitget, highlights another bearish factor for Cardano: the IFR. The indicator, which monitors price fluctuations, performed a bearish divergence.

“This is a sign of a drop in the asset, which has already suffered a 22% devaluation since its peak of the year and could reach a devaluation of 40%.”

If the downtrend continues and ADA loses the support at $0.57, its price may fall to the next support levels at $0.54 and $0.49.

On the other hand, reclaiming the midline of the current consolidation pattern at $0.69 would give signs that a new uptrend may be on the way.