Cardano has been trading within a shallow ascending trendline visible on the 4-hour chart, with the cryptocurrency recently finding support at this key level. The latest price action shows ADA/USD bouncing off the trendline support around $0.6800, suggesting bulls are defending this critical zone with conviction.
The price currently hovers near $0.7013, having recovered from a recent dip that tested the strength of the uptrend. This bounce occurred at the intersection of the ascending trendline and the 200 SMA (red line), forming a significant support cluster that has successfully halted the downward momentum.
Potential Cardano Reversal
Price is currently testing the neckline of what appears to be a head and shoulders reversal formation, which challenges the ongoing Cardano uptrend. A break below this support area could set off a drop that’s the same height as the chart formation.
Technical indicators show mixed signals, with the 100 SMA (blue line) positioned above the 200 SMA, confirming that the path of least resistance remains to the upside. However, the narrowing gap between these moving averages suggests diminishing bullish momentum that traders should monitor closely.
The stochastic oscillator is currently rising from the middle range, indicating increasing buying pressure without yet reaching overbought conditions. This suggests there’s still room for the indicator to climb higher, potentially supporting additional price appreciation in the near term.
Meanwhile, the MACD appears to be forming a potential bullish crossover near the zero line, which could signal renewed momentum to the upside if confirmed. The histogram bars are gradually transitioning from red to green, reflecting a shift from bearish to bullish sentiment among Cardano traders.
Uptrend Continuation Possible?
If Cardano successfully maintains support above the trendline and the key moving averages, we could see a push toward immediate resistance at $0.7200, followed by the recent swing high near $0.7500.
A sustained break above these levels could open the path to test the $0.8000 psychological barrier, which coincides with significant resistance from December 2024.
On the downside, a decisive break below the Cardano head and shoulders neckline and the 200 SMA would invalidate the bullish outlook, potentially triggering a sell-off toward $0.6200 or even the March lows around $0.5800.
From a fundamental perspective, Cardano continues to benefit from broader crypto market optimism, particularly as the industry anticipates favorable regulatory developments under the current administration.
However, traders should remain cautious as technical indicators suggest the bull run may be losing momentum, making proper risk management essential for any positions in the current market environment.