What Could Happen as Cardano Retests Key Descending Trendline

2026-01-21 14:43:07

Source: CryptoNewsNet Original Title: What Could Happen as Cardano Retests Key Descending Trendline Original Link:

Current Consolidation and Key Trendline Retest

The current consolidatory momentum has seen Cardano retest a key descending trendline, creating two possible price scenarios. Notably, the recent leg down has pushed Cardano to the neckline resistance from which it broke out, following its early January rally to $0.43. While this opens up an optimistic possibility, failure to hold this level could mark a notable price turnaround.

Breakout Analysis

Cardano previously broke above a descending trendline that had suppressed its price since October 2025, following its over 30% rally in the first six days of 2026. However, the current pullback has seen Cardano retest the descending trendline, creating two possible price scenarios.

A mixture of a broader market bearish trend and a structured technical move has drawn ADA back to the breakout area. Specifically, the Monday dump to $0.34 saw the coin retreat to the former neckline resistance and rebound.

If this level holds, another wave of bullish price action could follow. However, this remains subject to the broader market trend, which is difficult to predict.

Interestingly, the breakout also marked the first wave of a five-wave Elliott Wave pattern. If Cardano gains momentum above this breakout point, the January 19 drop would mark the end of the corrective wave 2.

Key Support and Resistance Levels

Currently, momentum looks weak, and prices may trend lower. The key levels to watch if the downside pressure persists are the demand zones at $0.329 and $0.278.

On the upside, a successful retest could see Cardano retest the early January high and its former lower highs within the descending trendline. The levels include $0.43, the November 11 high of $0.60, and the October 13 peak price of $0.73.

A separate 1D chart analysis also confirms this. If ADA breaks the $0.33 support, it will retest $0.27. However, a bounce from the support could take the asset towards the $0.50 price level.

Disclaimer: This is analytical exposition, not financial advice.

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