Cardano price holds $0.20 – But THIS level could decide ADA’s recovery
The $0.26-$0.28 supply zone from May was a key obstacle for the Cardano bulls to overcome.
Cardano [ADA] has rallied 2.42% in the past 24 hours, with an Open Interest increase of 2.5% in a day as of writing. The altcoin is up 17.7% over the past month.
The steady gains came alongside a Bitcoin [BTC] rally above $80k. However, while BTC has fallen back below $80k, the Cardano price continued to hold on to the $0.20 support zone.
Across different timeframes, ADA showed both bullish and bearish signs. The past month’s momentum was impressive, but investors need to look out for some warnings.
Cardano price prediction: Recovery hinges on this zone
The Cardano price has climbed above the 20-week Moving Average at $0.198 and flipped it to support for now. Yet, it was still below the $0.26-$0.28 area that is a key overhead supply zone.
Specifically, the $0.2887 swing high from May needs to be breached to allow ADA investors to believe in a long-term uptrend. The rally since June, though bullish, might still falter.
The CMF agrees with this idea, with a reading of -0.10 to signal capital outflows from ADA markets on the weekly timeframe.
Should ADA traders look to take profits?
The swing structure broke bullishly in June, when the latest lower high of the trend (back then, at $0.1849) was breached. The uptrend has kept going since then, with the Cardano price still on the bullish side of the 50-day moving average.
Yet, over the past two weeks, the altcoin has not managed to set a new high above $0.258.
At the same time, the $0.26-$0.28 supply zone from May was a key obstacle for the bulls to overcome. If they accomplish this, it would be a strong sign of recovery.
Until then, swing traders can maintain a bullish bias. A price move toward $0.26 can be used to take profits. Meanwhile, a drop below the $0.20 area would be a warning sign of a bearish shift.
If the $0.28 area is flipped to support, the next long-term buy opportunity could arise.
Final Summary
- Cardano has strong bullish momentum in recent weeks.
- This momentum has run into a pivotal supply zone, and capital inflows have slowed over the past week, according to the CMF.
