Cardano (ADA) is very close to falling below its yearly lows. It could confirm its bearish outlook with a decrease below $0.423.
The Cardano Vasil upgrade is expected to launch on Sept. 22. It will greatly increase the throughput capabilities and Network capacity of Cardano. Additionally, it will allow Decentralized Application (DApp) developers to create new experiences.
Even though Vasil will be deployed at the protocol level on Sept. 22, several new capabilities will be available only during the next epoch, more specifically on Sept. 27.
Vasil is the most comprehensive upgrade since Alonzo, which occurred during the fall of 2021.
ADA has been decreasing underneath a descending resistance line since reaching an all-time high price of $3.10 in Sept. 2021. The downward movement has led to a low of $0.40 in May 2022.
The low was made just above the $0.36 horizontal support area, which acted as the top in May 2018.
While the price has bounced slightly afterward, it has yet to reach the aforementioned descending resistance line. Furthermore, the weekly RSI has yet to break out from its bearish divergence trendline (green). Both of these have to occur in order for the trend to be considered bullish.
ADA wave count analysis
ADA is likely decreasing in a five-wave downward movement (black) since the Aug. 2021 all-time high. If so, it has just begun wave five after completing wave four inside a symmetrical triangle.
If the count is correct, the price will break down from the triangle and then fall towards one of the closest support levels at $0.32 or $0.22. The targets are given by the 1.27 and 1.61 external Fib retracement levels respectively when measuring the height of the triangle.
A breakdown below the $0.427 low (red line) will confirm this count while an increase above $0.594 high (green line) would invalidate it. At the current time, the latter seems unlikely.
The post Why Cardano (ADA) Could Crash Below $0.40 Before Vasil Upgrade appeared first on BeInCrypto.