The Cardano price crashed 40% following Bitcoins biggest-ever down day on Saturday before dip buyers erased most of the losses.
Cardano (ADA) crashed to a five-month low of $1.097 over the weekend as a devastating plunge in Bitcoin punished over-leveraged longs, causing widespread crypto chaos. The sell-off accelerated when BTC sliced through several support levels, triggering over $1 billion of stop-loss liquidations.
I’ve fired several warning shots about cracks emerging in the crypto bull market narrative recently. On November 24th, I outlined a case for Cardano falling to $1.00. On Saturday, my fears were realised when Cardano lost 30% intraday, almost tagging the $1.00 price target. However, buyers took advantage of the steep discount, paring the one-day loss to just -8.7%. Despite the impressive bounce, In my opinion, ADA will soon achieve my $1.00 price target and potentially exceed it.
The daily chart shows the Cardano price has broken down from a descending trend channel. As a result, the bottom of the pattern at $1.380 is now the first significant resistance level. Successful clearance of the trend (on a closing basis) could trigger an extension to the channel top and the 200-DMA at $1.860.
I expect the bearish momentum to resume as long as the price remains below the trend resistance. However, I am lowering my initial price target from $1.00 to $0.890 (April 24th low).
As mentioned, the bearish outlook relies on ADA remaining below the trend resistance. Therefore, a close above $1.380 invalidates the pessimistic view.
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This post was last modified on Dec 06, 2021, 00:37 GMT 00:37