The Cardano price currently finds itself in a risky position, and technical analysis highlights the possibility of a significant price correction. The analysis, conducted on the 4-hour candlestick chart and shared on TradingView, points to a potential 15% decline for the Cardano price in light of a recent break below the Exponential Moving Averages (EMAs).
Cardano Price Breaks Below EMAs To Open Up Bearish Scenario
As noted by a crypto analyst (SwallowAcademy) on the TradingView platform, Cardano started the week with four consecutive bearish candles on the 4-hour timeframe, leading to a drop below the drop below Exponential Moving Averages (EMAs). This drop below the EMAs on the 4-hour timeframe has triggered some sort of bearish outlook, which in turn opens up the risk of the Cardano price falling further in a short-term timeframe. With the possibility of more price decline in mind, technical analysis shows there isn’t any liquidity zone close to the current price action to act as a quick support level for Cardano.
The closest support level is about 7% away from the current Cardano price, and the analyst suggests that the cryptocurrency could revisit this level aat round $0.83. Should this support fail, the analyst warns of an additional 8% drop, pushing the Cardano price further down quickly to $0.76.
All in all, this would represent a quick 15% drop from the current Cardano price by the end of the week, a movement that the analyst noted could be bloody. “Eyes wide open here; it might get bloody,” the analyst said.
Bearish Scenario Can Be Invalidated
Although the bearish scenario is still in place, the analyst also provided a potential scenario that could invalidate this outlook. A strong upward bounce from here could send Cardano’s price above the $0.98 mark and a quick shift in the short-term price outlook. Such a rebound would bring Cardano back above the EMAs and indicate renewed bullish momentum to reduce the risk of further declines. In such a case, the analyst noted that Cardano would be able to push above $1.02 and eventually reach $1.2 to $1.3 in the next few days.
At the time of writing, Cardano is trading at $0.9544 and is up by 1.57% in the past 24 hours. Hopefully, the cryptocurrency can continue this upward movement to invalidate the bearish scenario.
Ultimately, the next few days will determine which scenario will play out for the Cardano price. If the bearish case unfolds as anticipated, the 15% correction could create new challenges for ADA holders. On the other hand, a bounce above $0.98 would reignite optimism for Cardano to retest $1.2, which is its highest price level in over two years, and ultimately break above it.
Featured image created with Dall.E, chart from Tradingview.com
