ADA falters at June high — Bulls can consider this level
ADA's pullback edged lower towards a crucial breakout level of $0.3 - a previous resistance. The $0.3 could hold only if BTC ...
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- Cardano faced price rejection at the June high, near $0.379
- Longs discouraged, underscoring short-term bearish sentiment
Cardano’s [ADA] sharp price reversal over the weekend affected bulls. Bulls secured over 30% gains after rising from $0.29 to $0.38 between 13-14 July. But the price slump seen over the weekend threatens to extend and reverse all the gains.
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In the meantime, Bitcoin [BTC] was yet to reverse losses incurred over the weekend too. It lost hold of $31k on Friday (14 July) and briefly breached $30k. It traded at $30.01k at the time of writing, and any further drop below $30k could expose altcoins to extra losses.
Will the $0.3 resistance be flipped to support?
The Relative Strength Index (RSI) retreated from the overbought zone and breached the 50-mark, reinforcing the short-term sell-pressure intensified. Similarly, the On-Balance-Volume (OBV) trended southwards, highlighting a decline in demand in the past few hours.
The June high aligned with a bearish order block of $0.375 – $0.382 (red) on the 12-hour chart. So, the roadblock, coupled with BTC’s sharp reversal, emboldened short-sellers to seek entry at the hurdle.
At the time of writing, ADA’s price action edged lower toward the previous resistance level of $0.3. The $0.3 level was also a March low and a crucial resistance level in late June/early July.
Hence, bulls could see a reprieve at $0.3 if BTC doesn’t drop below $30k. The conservative bullish target will be $0.337 if that’s the case.
But an extended drop below $0.290 and subsequent retest of $0.28 will invalidate the above bullish thesis.
Long positions discouraged
Read Cardano’s [ADA] Price Prediction 2023-24
At the time of writing, about $445k worth of long positions were liquidated in the four-hour timeframe, as per Coinglass. But short positions suffered less than $15k in the same period, underscoring the short-term bearish sentiment in the futures market.
Traders should track BTC price action and the $0.3 level for better-optimized trade set-ups.
