Cardano Sets Up More Bearish, Downside Forecasts

Cardano (ADA) has negated the early December bottoming efforts and has now set up a more bearish threat through year-end and for early 2023. Here we look at the downside risks and upside recovery targets that need to be recaptured to ease the bearish forecasts.

Cardano Base Pattern Negated

Cardano is a Proof of Stake (PoS) blockchain, a more efficient alternative to Proof of Work (PoW) networks. It was founded by Charles Hoskinson (co-founder of Ethereum) in 2015 and launched in 2017. The ticker symbol for Cardano is ADA, named after the Countess of Lovelace (1815-1852), Augusta Ada King, commonly regarded as the first computer programmer.

In our early December report on Cardano, we highlighted that the basing formation was being questioned by December losses. The mid-December plunge through the November lows clustered at 0.3001/0.2954 was encouraged by a bear gap at 0.2720-0.2806, down to a bear market low for 2022 at 0.2467. Furthermore, this acceleration to the downside has also produced a bearish technical analysis signal, with the probing below the bottom of the falling wedge pattern from mid-October. This leaves bearish forces very much intact for the end of 2022 and into January and, indeed the first quarter of 2023.

Bearish Extension Risks

Today’s prod, just below the recent bear market low at 0.2467, now aims for bearish Fibonacci extension targets at 0.2123, 0.1911, and even towards 0.1466 for January. In addition, 0.2000 would also be a psychological target amongst these levels.

Upside Recovery Challenges

Minimally, a pushback above the bottom of the bear gap at 0.2720 would start to ease short- and intermediate-term bear forces, though a gap closure above 0.2806 would better alleviate these negative pressures. Only though there would then set up a slightly more positive tone to maybe target the resistance cluster of peaks at 0.3205/3290.