As if the ramp-up of Chinese authorities clamping down crypto-related activities was not enough, major banks’ decision to cease the facilitation of cryptocurrency transactions added further pessimism to the cryptocurrency markets, and the Cardano price.
While the crash continues, all digital currencies continue to fall to lows not seen since well into the beginning of the bull run. And none are subject to a different treatment, including Cardano, and its ADA.
ADAUSD 1 hour chart
The Cardano price is very close to breaking its crash low of $1, where we could expect a short-term relief. However, the bearish impulse structure suggests that prices are in for further declines, potentially reaching the 55c level.
This is the 30% Fibonacci retracement of the full bullish leg starting at 1.7c on March 2020 and the 138.2% Fibonacci extension of waves W and X. The said extension level is often reached when waves Y of double zigzags break past the 100% of W and Y waves.
Furthermore, the Cardano price prediction above falls within the lower base channel’s zone, connecting the March low and wave (2) at 7.5c on September 2020.
To summarise the importance of the 30% Fibonacci retracement, wave (2) has corrected 70% of the entire bullish leg starting at 1.7c, which hints at a correction of 30% in wave (4) to fulfil the 100% retracement summation guideline often seen when measuring the depth of corrections.
Once wave (4) completes, and it could end a tad higher or lower from the said support projected in wave (4), wave (5) can be expected to shoot to fresh highs.
Correction May Elongate, Offering Short-term Upside Before Dip
Should the bearish impulse stop and reverse back higher, following either a false-break below W’s low or a weak attempt to break down below it, the medium-term structure may complete short of expectations.
In that scenario, the correction in wave X will likely continue with the upside taking prices back to the previous correction high near $1.95. Such a move will point at an elongated correction in wave X of (4), where wave X could form a flat pattern.
Only when ADAUSD reach near the local top should we expected the correction in wave Y of (4) to continue to its pre-projected destination of 55c.