Cardano edges closer to the Make-or-Break Point

The macroeconomic environment continues to take a toll on the cryptocurrency market as sentiment worsens. Although many market participants seem to be waiting on the sidelines, Cardano seems to be making a big price move.

Cardano continues to consolidate

Cardano appears to be on the verge of a significant price movement.

ADA has seen its price drop by almost 17% in the last three weeks. Looking at the daily chart, the decline came after a rejection from the hypotenuse of a descending triangle formation that began to develop in early May. Now Cardano is moving closer to the apex of the pattern, which expects a marked increase in volatility.

The height of the triangle’s Y-axis suggests that on a decisive close above support or below resistance, the ADA could stage a 44% price move. It is still important to wait for a clear break of the $0.48 resistance level or the $0.41 support.

An increase in buying pressure that pushes Cardano above the hypotenuse of the triangle at $0.48 could trigger a bullish breakout. If this were to happen, ADA could gain strength to rise towards its 200-day moving average of $0.63 or even the May high of $0.69.

However, losing the $0.41 level as support could encourage market participants to exit their long positions, adding downward pressure to Cardano. In this bearish scenario, ADA could resume its downtrend and target $0.33 or $0.25 in case of a sell-off.

Given Cardano’s ambiguous outlook, traders seem to remain on the sidelines, waiting for a clear signal before entering any positions. However, global macroeconomic conditions continue to weigh on crypto market sentiment, pushing the Crypto Fear & Greed Index into “extreme fear” territory. It may be difficult for Cardano to break out to the upside if such conditions persist.

Disclosure: At the time of writing, the author of this piece owned BTC and ETH. The information in this piece is for educational purposes only and is not investment advice.