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Pennants are a continuation setup that occurs when sellers take a pause as they take some profits off the table from the latest downturn.
ADA’s momentum has been stalled in the past few days as the Relative Strength Index (RSI) has flattened, moving within the 40 and 50 levels without establishing a clear direction yet.
As the chart’s dominant trend is bearish, this trading pattern has the odds in its favor. A break below the $0.650 level would confirm the pennant’s bearish bias and could push ADA to the $0.575 level, resulting in a total downside risk of nearly 18%.
ADA Retraces as RSI Hits Oversold Levels
Heading to the hourly chart, ADA has found support temporarily at the $0.694 level after the American session began.
If this support holds in the next few hours we could see ADA bouncing off this area as the Relative Strength Index (RSI) is stepping off oversold levels. However, as the dominant trend is bearish, this retrace could give late sellers the chance to enter a short position at an advantageous price point.
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