Cardano price fake-out? ADA’s 45% rebound in two days could trap bulls


The price of Cardano (ADA) climbed from $ 0.48 on May 30 to $ 0.68 on May 31 – 45% accumulation in less than 48 hours. But ADA / USD failed to extend its rally higher and fell by almost 13.75% from its weekly high.

ADA price: bear market vibes

Cardano’s price retreated sharply on June 1, giving up part of the gains secured in the previous two days. The question now arises as to whether or not the ADA / USD pair can extend its recovery trend, especially as it trades almost 80% below its September 2021 peak of $ 3.16.

Interestingly, the downside began after ADA tested its 50-day exponential moving average (50-day EMA; the red wave in the chart below) as resistance. Also, the pair moved lower along with broader corrective sentiment across riskier assets, including Bitcoin (BTC) and the S&P 500 (SPX).

2c955220 1c1a 4fa9 8484 db657a21aaae
Daily price of ADA / USD. Source: TradingView

Now, Cardano’s token risks further price correction, according to Digital Trend, a financial analysis contributor at SeekingAlpha. noting that ADA has seen sharp price bounces in the past that have turned into bullfighting traps, adding:

“In March, we saw the ADA go south from $ 0.80 to more than $ 1.24 in a few weeks. This, to me, looks like another fake.”

Several fundamental factors also support a bearish outlook. On June 1, the Federal Reserve will begin downgrading its $ 9 trillion portfolio, likely creating more adverse winds for risky assets, including Cardano.

“I don’t think we know the effects of QT [quantitative tightening] yet, especially since we haven’t done much of this thinning of the balance sheet much in history, ”Dan Eye, the chief investment officer of Fort Pitt Capital Group, told Market Watch, adding that removing liquidity from the market “would affect multiples in valuations to some degree.”

Cardano price paints bull pennant

From a technical perspective, Cardano could continue its recovery trend in June due to a bullish continuation pattern.

Related: Bitcoin’s recent gains have traders calling bottom, but various metrics remain bearish

ADA has solidified within what appears to be a “bull pennant,” confirmed by the price fluctuating within a triangular structure after a massive move upward, called a “flagpole”.

As a rule, a bull pennant dissolves after the price breaks above its uptrend and increases as much as the height of the flagpole.

ed04f096 2dce 42e1 8410 b3f6574e634b
ADA / USD hourly price chart with ‘bull pennant’ setting. Source: TradingView

In other words, a bullish target of $ 0.77 in June, more than 25% of today’s price.

ADA / BTC sees a similar additional arrangement

ADA painted a similar pennant arrangement against Bitcoin, raising the chances of a rise for the ADA / BTC pair in June.

00aa0176 5442 4af3 a01c 69d010d51eb6
ADA / BTC hourly price chart with ‘bull pennant’ setting. Source:

As a result, the decisive break of ADA / BTC above the uptrend of the pennant could raise it to 0.00002355, more than 23% of today’s price.

The views and opinions expressed herein are those of the author only and do not necessarily reflect the views of Every investment and business move involves risk, you need to do your own research when deciding.