The Bitcoin market has been noting a consolidation phase in the short term, resulting in most altcoins finding a stable price. Cardano [ADA] was witnessing a strong bullish pull as its value surged over the past day by 16%. However, the price ended up settling sideways given the dominant BTC trend.
Cardano hourly chart
Source: ADAUSD on TradingView
The ADA value can be seen rising within an ascending broadening wedge. The price oscillated between the two upwards lines, marking resistance and support. The price was expected to break down from this pattern but, given the low volatility, it was seen consolidating instead.
ADA maintained support at $1.71 and was trading at $1.73. Meanwhile, resistance remained strong at $1.77 as the price has already tested this level twice and failed. This suggested that ADA may continue to move between its immediate support and resistance in the short term unless volatility increases.
Reasoning
As the price rejected resistance and moved sideways, volatility was reducing. The low volatility market has given an upward push to the signal line and 50 moving average, as they inched closer to the candlesticks. This was a sign of the market losing momentum which can also be confirmed by Awesome Oscillator. The indicator suggested that ADA was building on bullish momentum, but as the price began consolidation, momentum has also reduced.
The consolidation phase could turn into a bearish trend. Selling pressure could rise and push the digital asset closer to its next support at $1.62. The rise of selling pressure in the market can be seen through Stochastic RSI, which was moving toward the oversold zone. Interestingly, RSI has also crossed under the signal line, suggesting the beginning of a bearish market.
Conclusion
The current Cardano market was abiding by the dominant trend in the market and moving sideways. However, this movement can be challenged by the evolving bearishness in the market. If the price fails to hold on to the support, selling pressure could push the value of ADA to $1.62.
