The cryptocurrency market is attempting a recovery ahead of today’s CPI data release after a week-long correction. Ethereum (ETH) has dropped over 17% in the past seven days, putting pressure on the broader altcoin market. Amid this downturn, Cardano (ADA) has taken a 24% hit but is showing early signs of a rebound after defending a key support level.

Descending Broadening Wedge Formation

On the daily chart, ADA has been trading within a Descending Broadening Wedge pattern since its rejection from $1,32 on December 3. This structure has led to a corrective move, with lower highs and lower lows.

After a fake breakout attempt, ADA dropped to $0,58 earlier this week but found support at the 200-day moving average. The price has since rebounded to $0,74, and a strong bounce from this level could push ADA toward the upper resistance trendline around $0,90. Breaking out of this pattern could trigger a bullish move in the coming days.

Will ADA Confirm a Reversal?

If ADA fails to hold this support, further downside pressure could push it below $0,58. However, the MACD is showing early signs of a bullish reversal, with the MACD line attempting a crossover above the signal line. If confirmed, this could strengthen ADA’s recovery and invalidate the bearish structure. A climb above $0,90 would signal renewed bullish momentum, while a drop below $0,58 could extend the downtrend.