Cardano has formed higher lows and lower highs to trade inside a symmetrical triangle chart pattern. Price just bounced off the top and looks ready for a test of support.
The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside or that support is more likely to hold than to break. In that case, another bounce to the triangle top could take place. The 200 SMA is also just below the triangle bottom to add another layer of support in the event of a break lower.
Stochastic is heading lower, though, so sellers have the upper hand. This oscillator has plenty of room to slide before reaching oversold levels, which means that selling pressure could stay in play for longer. RSI is also moving south so Cardano price could follow suit while bearish momentum is on.
Cryptocurrencies are on shaky footing over the past few sessions, likely due to the warning from the IMF in their latest World Economic Outlook report:
“Cybersecurity breaches and cyber attacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services. Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”
It also went on to stress the importance of regulation:
“An indiscriminate rollback of post-crisis regulatory reform and oversight—both domestically and internationally—could encourage excessive risk-taking, leading to a further buildup of financial vulnerabilities.”
Furthermore the IMF downgraded global growth forecasts, adding to the risk-off sentiment in global financial markets. In these cases, traders are usually discouraged from buying or holding on to riskier assets like cryptocurrencies.
Still, Cardano has drawn some support from the launch of its first open source project, which makes it easier for developers to build products on its blockchain.