While Cardano’s current state might seem bearish, it will provide the buyers an opportunity to come back a lot stronger and push the so-called “Ethereum killer” to record levels.
Cardano price to face a setback before liftoff.
ADA price rallies seem to be correcting approximately 30% since hitting the $1 level. Like the current downtrend, the last two pullbacks were due to the SuperTrend indicator’s sell signal. Additionally, each of these downswings ranged anywhere from 30% to 33%. Therefore, if something similar were to happen this time, Cardano could drop 15% from its current price at $1.23 before it kickstarts a bull rally.
Interestingly, this pullback coincides with the 100 four-hour moving average (MA) at $1.03.
Based on IntotheBlock’s In/Out of the Money Around Price (IOMAP) model, nearly 32,500 addresses who purchased 1.65 billion ADA at an average price of $1.26 are “Out of the Money.” So, any buying pressure could be absorbed by these investors who may want to breakeven. This selling activity will create a downward pressure pushing ADA lower and supporting the short-term bearish thesis. Furthermore, IOMAP cohorts show that 52,300 addresses hold roughly $1.29 billion ADA at $1.10. So, the 15% drop could be cut short to 10%.
Either way, Cardano price seems primed for a pullback to $1.10 or $1.03 before bulls come charging in.
However, after the pullback, the so-callled “Ethereum killer” can be expected to surge past the aforementioned resistance barriers as the inverse head and shoulders pattern is still in play. Based on this technical formation, Cardano price could soar 100% from $1.03 to tap the target at $2.08.
While the pullback seems likely, eager bulls could invalidate the short-term bearish thesis by pushing past the SuperTrend indicator’s sell signal at $1.42. This move will kickstart a bull rally pushing the Cardano price to a new all-time high.