Connect with us
Active Currencies 14355
Market Cap $2,757,407,560,406.00
Bitcoin Share 50.86%
24h Market Cap Change $8.55

Cardano: The if and how of reclaiming this major level

2min Read
Cardano trending lower down the charts, but does it also present a high-reward opportunity?

Share this article

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

Bitcoin always has a massive impact on the long-term trend of most altcoins. In the case of Cardano, the downtrend of Bitcoin from its highs near $69k has had a brutal effect on Cardano’s own trend. ADA has lost nearly 75% since its ATH, compared to the 40% figure for BTC. The psychological and technical level of support at $1 was lost to selling pressure last month- can the bulls reclaim this level?

ADA- 1D

Cardano trending lower down the charts, but does it also present a high-reward opportunity?

Source: ADA/USDT on TradingView

The trend has been persistently bearish once the $2.2 level was broken on a move south back in September last year. Since then, the price has crashed through multiple levels of support, with $1.2 and $1 being some of the most important long-term levels of significance.

At the time of writing, the charts did not look encouraging to the long-term buyers. The price was trading below the $0.85 area at press time. The $1.1 area had seen a bullish order block back in July. In recent months, this area saw some demand arrive, but buyers have been exhausted since.

It was imperative that prices break past the $1 level in order to begin to flip the longer-term bias toward bullish.

Rationale

Cardano trending lower down the charts, but does it also present a high-reward opportunity?

Source: ADA/USDT on TradingView

The price on the daily chart was trading beneath the 21 and 55-period simple moving averages (orange and green). This showed a strong downtrend, which the series of lower highs can also attest to. In recent days, the price made a series of lower lows while the RSI made higher lows- a bullish divergence.

This could see a minor bounce toward $0.93-$0.98, which offered some liquidity to the upside for the price to be attracted to. However, such a bounce would only be yet another opportunity to sell ADA.

The OBV has been steadily falling, a sign of steady selling volume and a genuine lack of demand in recent months to overwhelm the sellers.

Conclusion

The price action and the indicators pointed toward further downside for ADA, although a small bounce toward $0.93 could be seen in the next few days. Unless ADA can rise past $1 and test $1.2, risk-averse investors can opt to wait for a buying opportunity to present itself.

Share

Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.