- Cardano price signals a bullish breakout, which could be very short-lived.
- ADA price will drop back to $0.388 in the coming weeks.
- As the global economic situation further deteriorates, expect a possible 70% price evaporation.
Cardano (ADA) price is trading on Wednesday’s European morning in a pattern many bullish traders have been waiting for. The breakout above a technical bearish element could trigger some gains, as traders must be aware that this will not be a trade to sit in for long and needs to be managed with care. The devil could be in the details, with recession signals now in the bond market and the EUR/USD quickly nearing parity.
Cardano price is trading sideways at the time of writing, between $0.687 to the upside and $0.388 to the downside. This morning's opening in the ASIA PAC session broke above the orange descending trend line identified as the short-term backbone of the descent within the overall downtrend. Many bullish traders will be keen to jump on that break but need to be aware of the overall downtrend as a bullish market does not seem to be underway, with several economic indicators deteriorating and the bond market signalling a recession nearby.
ADA price could thus still tick that monthly pivot at $0.52, which coincides with the 55-day Simple Moving Average (SMA) that is starting to flatline a little bit, mainly because of that underpinned price action for over a month now. Once market participants pull out their money again on the back of confirmation that the global economy is deteriorating, expect an exodus in ADA price action with a drop towards $0.388. Bulls will get squeezed out of their positions, and a falling knife is bound to happen towards $0.11 once $0.388 breaks and gives way.
ADA/USD daily chart
If bulls can take over the 55-day SMA and break above it, expect to see another leg up towards $0.687 as bulls will want to cover as much ground as possible. Next, decoupling cryptocurrencies against global markets could attract even more investors who do not know where to put or place their money. That could result in a 40% gain before the Relative Strength Index (RSI) hits are overbought.