- Cardano price managed to regain significant levels that saved the asset from falling further.
- Going forward, ADA must close above the 200-day SMA for any chance of recovery.
- Cardano could continue to move sideways as indecision mounts.
The Cardano Prize has regained strength after losing crucial support on July 19th. However, ADA continues to be consumed by indecision as the asset experiences a balance between buyers and sellers.
The Cardano price faces a difficult decision
Cardano price has printed a descending triangle pattern on the daily chart, which is a bearish trend for ADA.
The prevailing chart pattern suggests that ADA bulls may be vulnerable. However, Cardano price created an oversold figure as shown by the Relative Strength Index (RSI) on July 20th. ADA rebounded nearly 18% to $ 1.22 on July 20, closing above critical support levels.
Cardano price appears to have recaptured the 200-day Simple Moving Average (SMA), and that level continues to act as a crucial line of defense for ADA.
Despite the bearish bias given by the prevailing chart pattern, Cardano price could attempt to mark the hypotenuse of the triangle in the next few days, with the 50% Fibonacci expansion level at $ 1.26 near the 20-day SMA collapses. Only a close above the 200-day SMA could signal a rebound for ADA.
ADA / USDT daily chart
In the absence of buying pressure, further upside targets are currently unlikely as the upper bound of the triangle has acted as a rigid resistance for ADA since May 19th. However, a breakout above this level could indicate a potential rally for Cardano Price, with the highest expected level of $ 1.75, represented by the prevailing technical pattern of nearly 53% rise.
To achieve the above ambitious goal, ADA would have to cut through the 50-day SMA, which corresponds to the 78.6% Fibonacci expansion level.
The lackluster trading volume observed by ADA suggests that as the indecision mounts, Cardano is likely to continue to move sideways.
Breaking below the 200-day SMA could get the bulls in trouble as Cardano could see the swing lows retested at $ 1.02 before falling further below the base of the triangle at $ 1.00.
Should ADA experience further selling pressure, investors should expect Cardano price to collapse towards the lower bound of the demand zone, which starts at $ 0.92, the April low.