ADA has traded lower since reaching an all-time high of $1.48 on 27 February
Cardano’s price is restricted near a critical support level and could see further losses despite the bulls’ efforts to recover from a 5% downturn during early trading on Friday.
As of writing, ADA/USD is trading around $1.09, having bounced off lows of $1.05. However, the potential for more downsides is increasing with bulls unable to break above the $1.12 resistance zone.
If prices drop further, bears could sink ADA’s price below $1.05, with losses likely to extend towards the psychological $1.00.
On the contrary, a clear break above the stubborn barrier at $1.12 would allow for a retest of $1.20. Achieving this could invite increased buy-side pressure and see ADA/USD target its recent peak.
ADA price bearish outlook
Cardano has traded lower since rallying to an all-time high of $1.48 on 27 February. The ADA/USD pair has thus formed a descending triangle pattern on the 4-hour chart. The pair has broken below and retested the horizontal support line twice, with prices likely to continue lower.
The RSI is well below the midpoint; currently struggling for an upward slope near 38 to give bears an upper hand. The MACD is also within the bearish zone, with a suggestion that the momentum is with the sellers.
To add to the difficult task facing bulls is ADA’s price that has crossed below the 20-day exponential moving average ($1.12).
If there’s an extended sell-off, Cardano’s price could dip below the triangle’s horizontal support line. This would mean the descent might accelerate past the demand wall at $1.03, with fresh selling likely to invigorate bears.
If this happens, bears are likely to pierce the demand wall at $1.00 and sink ADA/USD to lows of $0.89.
ADA price upside flip potential
ADA price could start a fresh upside and correct above immediate resistances near the 20-day EMA and 0.236 Fibonacci retracement level ($1.14). Above this level, buyers can target the descending trend line, with a clear break above the 0.382 Fib level at $1.20 likely to welcome fresh bids for ADA/USD.
The price might then move towards the resistance of the 0.5 Fib level ($1.25) and 0.618 Fib level ($1.31) on the 4-hour chart. Further upsides could see Cardano’s price retest the all-time peak and seek new highs above $1.50.