Cardano is holding above a crucial long-term support level and looks good for a long entry as long as it stays above it.
Despite the broader market dip, Cardano (ADA) has been trading above this crucial support level, providing a basis for a recovery if the trend continues. Moreover, the recent dip is part of a broader ABC formation, with Cardano in corrective wave 3.
Key Points
- Cardano is holding above a key long-term support level and looks good for entry as long as it stays above it.
- From a technical analysis standpoint, ADA is only following an ABC structure formation in the monthly chart.
- Cardano started this formation in December 2024 when it rallied to a high of $1.326 and corrected.
- Since the August 2025 high, ADA has been in a downtrend, consistent with corrective wave C in the ABC pattern.
- The coin provides a good risk-to-reward ratio for long entries as long as it holds above the $0.241 support zone.
Cardano and the ABC Structure
Notably, Cardano has exhibited price weakness in the past few weeks. While its price has increased by 4.30% since this week, the 11th largest cryptocurrency by market cap has retraced by 25% in the past month, following a broader market trend.
However, from a technical analysis standpoint, ADA is only following an ABC structure formation in the monthly chart. The current downtrend aligns with wave 3, which, according to financial trader Mathew Dixon, is corrective.
An accompanying chart shows that Cardano started this formation in December 2024 when it rallied to a high of $1.326. The first wave was corrective, pushing the cryptocurrency to a low of $0.511 in April 2025.
Cardano ABC Pattern/DixonWhat followed was a rebound in wave 2, which took prices to the August 2025 high of $1.019. Since then, ADA has been on a downtrend, aligning with the corrective wave C in the ABC pattern.
Cardano Holds Key Support Level
The analyst sees holding this support as a sign of higher ADA prices. According to him, the coin provides a good risk-to-reward ratio for long entries as long as it holds above this zone. However, he did not mention any targets for Cardano if it does trend higher from here.
Caveats to Note
While Dixon is optimistic about Cardano’s recovery, he noted that things could quickly turn bad if it falls below the $0.241 support level. He called this scenario a “serious concern” for the asset’s near-term trajectory.
As a result, his analysis does not provide certainty that the coin will reverse the prevailing bearishness. His optimistic view hinges on how Cardano reacts to this support, which it has so far held nicely. However, a further pullback from the broader crypto market could threaten this setup and prolong the corrective wave 3.
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