ADA signals 35% correction on weaker technicals
ADA’s price is showing signs of potential downside risk as a bearish “rising wedge” pattern forms on its four-hour chart.
The technical structure, defined by converging trendlines sloping upward, often signals a potential trend reversal to the downside.
If ADA breaks below the wedge’s lower trendline, the breakdown could be as deep as the height of the wedge’s widest part.
This projects a potential price target near $0.598 in the short term and $0.513 in a more extreme bearish scenario for November-December.
Interestingly, the $0.513 level, down about 35% from the current price levels, aligns with the 200-4H exponential moving average (200-4H EMA, the blue wave).
Volume has been declining during ADA’s recent upward move, which is another warning sign of a weakening rally. Bearish patterns, like the rising wedge, are more reliable when coupled with decreasing trading volumes.
Cardano’s chart also shows a growing deviation between rising prices and a falling relative strength index (RSI), indicating bearish divergence, which signals weakening upside momentum.
The RSI sits at 68, close to the overbought territory of 70, further suggesting that ADA is nearing an overextended phase, which may result in a price correction.