ADA Price Nearing Triangle Breakout Eyes $0.655

A descending triangle pattern has governed the Cardano (ADA) price action for the past two months. Moreover, the coin price currently narrowing within the pattern’s barriers could soon lead to a decisive breakout. A potential bullish breakout could breach overhead resistance of $0.655 and end the ongoing range-bound rally.

Key points: 

• The technical indicator suggests a bullish breakout from the triangle pattern.
• The coin buyers have aggressively defended the $0.446-$0.436 support zone for the past two months.
• The intraday trading volume in the ADA coin is $523.6 Million, indicating a 15.3% gain.

Source- Tradingview

Over the past few months, the crypto market has faced several events that have put continued mayhem in crypto investing. The Terra ecosystem crash, the recent Three Arrows Capital (3AC) forced liquidation, etc., pulled many cryptocurrencies to new 2022 lows.

However, amid this downfall, the ADA/USDT buyers have mounted stiff support at the $0.436 mark. The coin chart showed multiple retests to this support level, indicating a high-demand zone. However, a descending trendline has been limiting bullish attempts to establish a genuine recovery rally for nearly three months.

Thus, a fixed support and falling trendline has revealed a descending triangle pattern in the daily time frame chart. Theoretically, this is a bearish continuation pattern, where the lower high formation indicates a loss of bullish momentum.

Furthermore, over the past few weeks, the ADA price has been trading in a short-range, suggesting indecisiveness among market traders as the price is nearing the pattern’s apex. Thus, a breakdown from the $0.446-$0.436 support zone would indicate the continuation of the downward spiral to $0.33 support.

Conversely, a potential breakout from the descending trendline could replenish the ADA bullish momentum and surge to its nearest target at $0.655.

Technical Indicator

RSI indicator: A constant rise in daily-RSI slope despite a range-bound rally in price action indicates rising bullish momentum. This bullish divergence increases the breakout potential from the triangle pattern.

EMAs: The ADA price trading below the crucial EMAs(20, 50, 100, and 200) suggests that the expected rally may face multiple resistances.

• Resistance levels- $0.546, and $0.655
• Support levels- $0.436 and $0.4