Cardano [ADA]: Could latest rejection at key support push prices to March lows?
- Bullish rally halted at $0.4161 resistance level.
- Futures market remained bearish.
Cardano’s [ADA] rally from the bullish order block between $0.3757 and $0.3852 has been halted twice at the $0.4161 resistance level. An earlier report had highlighted the possibility of a bearish swing if prices failed to push past the resistance.
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Bitcoin [BTC]’s short-term correction to $28.5k could provide ADA bears with the momentum needed to push past the bullish order block.
No momentum for ADA bulls
ADA has been on a bearish swing since 15 April after price got rejected at the $0.4580 level. It aggressively pushed past the $0.4161 level before finding support at the $0.3763 level. Price rallied briefly but could not reclaim the $0.4161 level.
The latest rejection at the $0.4161 level saw ADA drop back into the bullish order block with heavy selling pressure in the four-hour timeframe. If the support holds again at the $0.3763 level, bulls could mount another attempt at taking the $0.4161 level.
However, a four-hour or daily candle close below the bullish order block and support level will impede any bullish bias. This will see the price sink further with bears targeting Cardano’s March swing low of $0.3505.
The Relative Strength Index (RSI) and On Balance Volume (OBV) indicators both favor the bearish approach. As of press time, the RSI stood at 34, reiterating the bearish momentum. The OBV also posted a 56.3M dip – an indication of decreased demand in the past few hours.
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Shorts maximize bearish momentum
The four-hour chart from Coinalyze showed the spot CVD for Cardano has been in a downtrend, since 15 April, which correlated with the start of the bearish swing. The Open Interest also declined by $74.3 million, with the futures market reacting negatively to the downtrend.
The liquidation data from Coinglass showed 937.45k worth of long positions were liquidated over the past 72 hours, while shorts had only $165.62k liquidated. It painted a mid-term bearish outlook that could see ADA sink lower.