- \n
- Cardano price has been consolidating in a descending triangle pattern for nearly ten days.<\/strong><\/li>\n
- A breakout from this setup forecasts a 16% move, potentially to the upside.<\/strong><\/li>\n
- If ADA produces a decisive close below $1.20, it will invalidate the bullish thesis.<\/strong><\/li>\n<\/ul>\n
Cardano price has been consolidating above a crucial level by producing roughly equal lows and lower highs, giving rise to a generally bearish pattern. However, due to its location at a critical demand zone, ADA has a chance at a bullish breakout<\/a>.<\/p>\n
Cardano price eyes higher highs<\/strong><\/h2>\n
Cardano price set up three lower highs and roughly two equal lows around $1.20 since December 7. Connecting these swing points using trend lines result in a descending triangle. This technical formation usually resolves to the downside and is considered a bearish pattern. However, Cardano price has formed this consolidation pattern just above a daily demand zone, extending from $1.02 to $1.19. Therefore, the chances of ADA heading lower are low.<\/p>\n
Regardless, this setup forecasts a 16% breakout<\/a> to $1.51, determined by adding the distance between the first swing high and swing low to the breakout point. Assuming a bullish outlook, ADA needs to produce a four-hour candlestick close above the triangle\u2019s hypotenuse at $1.30 to trigger a bull rally.\u00a0<\/p>\n
During this ascent, Cardano price will face the $1.45 hurdle that needs to be overcome for the bulls to hit their target at $1.51.\u00a0<\/p>\n
![\"ADA\/USDT](\"https:\/\/editorial.fxstreet.com\/miscelaneous\/ADAPERP_2021-12-17_08-21-41-637753073370052112.png\")
<\/a><\/p>\nADA\/USDT 4-hour chart<\/small><\/p>\n
Although unlikely, if Cardano price produces a four-hour candlestick close below the triangle\u2019s base at $1.20, it will signal a bearish breakout<\/a>. In this case, the descending triangle forecasts a 16% downswing to $1.00. For this outcome to play out, ADA bears need to slice through the massive demand zone first, extending from $1.02 to $1.19.<\/p>\n
\n - A breakout from this setup forecasts a 16% move, potentially to the upside.<\/strong><\/li>\n