Originally published on: November 20, 2024
Cardano’s price has been on a meteoric rise, increasing by 140% in November thanks to the news of Donald Trump’s reelection as President of the United States. However, there are indicators suggesting that this rally may soon come to an end.
Recent analysis shows that ADA’s price is forming a bearish “rising wedge” pattern on its four-hour chart, indicating a potential trend reversal to the downside. If ADA breaks below the lower trendline of the wedge, we could see a significant drop in price, potentially reaching levels as low as $0.598 in the short term and $0.513 in a more extreme scenario by December.
The declining trading volumes during ADA’s recent surge, coupled with bearish divergence between rising prices and falling RSI, further signal a weakening rally. The RSI is also approaching overbought territory, suggesting that ADA is nearing an overextended phase and may be due for a correction.
However, a decisive breakout above the upper trendline of the wedge, with higher volume, could invalidate this bearish outlook and open up the possibility of testing the $0.90 resistance level. This level has historically acted as strong resistance since April 2022, and a break above it could signal continued upward momentum for ADA.
On a more positive note, Cardano’s fundamentals have improved with the prospect of Trump’s administration avoiding heavy-handed crypto regulation. This may lead to increased demand for cryptocurrencies like ADA in 2025.
While this article does not provide investment advice, it’s essential to conduct your research and analysis before making any trading decisions. Stay informed with critical insights by subscribing to the Markets Outlook newsletter for expert perspectives on investment opportunities and risk mitigation strategies.