Cardano’s Pivotal Moment: Correction Phase or a Rebound on the Horizon?

• Descending Triangle Formation: ADA’s correction hovers near $0.90, with $0.70 as potential bottom.
• Resistance Challenges: Break above $1.07 could target $1.39–$1.55; $1.01 remains tough.
• Oversold RSI Levels: Momentum hints at reversal, but a drop below $0.81 invalidates bullish setup.

Cardano ($ADA) finds itself at a crucial juncture. After a strong uptrend pushed its price to $1.31 on December 3, ADA has entered a correction phase—a natural step in its price cycle. As of now, it’s trading at $0.90, hovering near the 0.382 Fibonacci retracement level, a key area to watch.

Descending Triangle: Nearing the End of the Correction?

The correction has taken the form of a descending triangle, a pattern often associated with continued consolidation. But the big question is: are we nearing the end of this pullback?

The Relative Strength Index (RSI) on the daily chart is sitting below the 50 average level, signaling weak momentum. However, this also suggests that the correction phase might be wrapping up. If the downtrend continues, ADA could potentially bottom out around $0.70, another critical support zone.

On the flip side, a breakout above $1.07 (the 0.236 Fibonacci retracement level) could signal that ADA is gearing up for its next leg upward.

Hourly Chart: Short-Term Price Action

On the hourly chart, ADA recently slipped below a support line at $1.07, creating new support levels at $0.89 and $0.81—with the latter being more significant. Should the price begin an upward move, the first resistance to watch is at $1.01, followed by $1.13, which could act as a challenge before reaching higher targets like $1.39 or even $1.55.

Interestingly, the RSI on the hourly chart is nearing oversold territory, a sign that a reversal might be on the cards soon. If buying pressure picks up, ADA could aim for these higher levels in the short term.

What’s Next for ADA?

If ADA drops below $0.81, the bullish narrative falls apart, likely signaling a deeper correction. However, if support holds, Cardano might see a renewed uptrend, possibly testing resistance at $1.07 and beyond.

For now, traders and investors are watching the charts closely. Will Cardano find its footing and rebound, or is there more downside ahead?