Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
For over a week, the one-month trendline resistance (white, dashed) and the 50% Fibonacci level have created a stiff buying hurdle. As a result, Cardano’s [ADA] flip from the $0.48-level aided the sellers in imposing an ascending broadening wedge breakdown.
The broader outlook exhibited bearishness, especially after ADA failed to sustain above the 20/50/200 EMA in the 4-hour timeframe. A continued plunge from the pattern could pull the alt to retest its long-term support. At press time, ADA was trading at $0.4549.
ADA 4-hour Chart
Source: TradingView, ADA/USDT
As the 20 EMA (red) fell below the 50 EMA (cyan), the near-term narrative for the altcoin took a bearish stance. The trendline resistance has shunned the recent bullish efforts to reclaim critical support levels.
Further, the price action saw a break below the broadening wedge whilst the EMAs still looked south. A consistent bearish pull could help the sellers retest the $0.43-$0.44 range in the coming sessions.
However, the price action now entered into a relatively high liquidity region. So, an inability to inflict a robust bearish, or bullish move could extend the sluggish phase on the chart.
With the rejection of higher prices evidenced by a bearish hammer, the bears could steer the near-term trend. An immediate buying resurgence above the Point of Control (POC, red) could shun the bearish tendencies. Here, the trendline resistance could constrict the bullish efforts.
Rationale
Source: TradingView, ADA/USDT
The Relative Strength Index took a bearish outlook hovering below the 41-resistance. A breach above this support could aid the buyers in easing the selling pressure.
Further, the OBV marked higher troughs over the last week and affirmed a slight increase in buying vigor. However,
