ADA price has broken out of a consolidation range but is struggling to move higher. The presence of a resistance confluence makes this run an arduous task for the bulls.

ADA is exiting the consolidation but things are getting worse

ADA has been trading between the $1.12 and $1 levels for about 2 weeks, which is signaling a consolidation. On February 5th, the price broke out of this range and created a swing high above $1.12, turning it into a support floor.

ADA faces two key hurdles trading above $1.12, the weekly resistance at $1.20 and the 50-day simple moving average (SMA) at $1.24. As a result, the chances of a price increase will be significantly lower.

So, at one of these levels, it is likely that the price will be rejected and slide lower. Failure to break the 50-day SMA at $1.24 will result in a 15% drop to the daily support at $1. It served as support for the mid-2021 bull run that pushed Cardano’s coin to $3. Therefore, this stable support floor is where the disadvantages can be limited.

Source: TradingView

Supporting the downtrend is IntoTheBlock’s Global In/Out of the Money (GIOM) pattern. Notably, there is no immediate support for ADA and the existing stability level at $1.03, adding further credibility to the short-term bearish prediction. Therefore, investors can expect ADA to gain a foothold around this barrier, where approximately 448,830 addresses that bought 7.78 billion coins are now profitable (In the Money).

 Source: IntoTheBlock

Another reason ADA is unlikely to show an upward trend is that the number of large transactions has dropped from 5,100 to 4,900. This 3.9% decline shows that investors are not interested in current levels.

Source: Intotheblock

All in all, the price seems poised to drop quickly to $1 – an important psychological level. The bearish outlook may be reversed if the bulls close a four-hour candle above $1.24.

This gives ADA time to rally to $1.45 (up 17%). After that, upside potential is likely to be capped here as this is the confluence of weekly resistance and the 100-day SMA.

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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