Positive price action in the past 24 hours has seen Cardano (ADA) rebounding upwards alongside the rest of the crypto market. The entire market is up by 4.3% in the past 24 hours, a trend that has seen the Cardano price also breaking above the $1 mark again.
Interestingly, Cardano’s recent break above $1 comes just hours after it bounced on a support zone around $0.92-$0.95. Despite this break, technical analysis shows that there remains a risk of a Cardano price crash in the short term.
Key Support Zone Interaction Near $0.92-$0.95
A technical analysis of Cardano’s 4-hour candlestick chart, shared by crypto analyst melikatrader94 on TradingView, highlights a compelling confluence as Cardano attempts to regain upward momentum. The analysis identifies a support zone near $0.92-$0.95, which coincides with an upward-sloping trendline that has served as support for many weeks.
Cardano’s towards the support trendline is a notable decline after its price reached a peak around $1.16 on January 17. Furthermore, this reversal comes after the cryptocurrency experienced another upswing that began when it rebounded from the same upward-sloping trendline near $0.89 on January 13. These repeated interactions with the trendline and the support zone show the volatility surrounding Cardano’s price over the past days and the ongoing battle between bullish and bearish market participants.
Since the analysis, Cardano has rebounded again just before reaching the upward-sloping trendline and is now on an upward move. As noted by the analyst, this move might push Cardano’s price back toward its recent highs near $1.10. If this upward momentum is sustained, ADA may also continue upwards until it reaches a key resistance zone between $1.10 and $1.15. A successful breach of this level would further reinforce the bullish outlook and the continuation of a broader uptrend.
Risk Of Breakdown Toward $0.85 Or Lower For Cardano
For the bullish scenario to play out, ADA needs to hold firmly above the support zone and along the ascending trendline. This alignment suggests a continuation of the upward trend that Cardano has been following since late 2024. Secondly, Cardano bulls would need to break above the resistance level highlighted between $1.10 and $1.15 in order to flip the level into support on the long-term.
However, the intense volatility witnessed in the past few days opens up the possibility of a failure to hold above these levels. With this, the analyst warned that a decisive breakdown below the $0.92 level and the ascending trendline would invalidate the bullish outlook. Such a move could pave the way for a deeper correction and cause the Cardano price to drop toward $0.85 or even lower.
At the time of writing, Cardano is trading at $1.02 and is up by 2% in the past 24 hours.
Source: NewsBTC