Cardano
Cardano: Why analyst thinks ADA’s pullback is great for its price
Posted:
| Last updated: March 11th, 2024
Journalist
- ADA plummeted to $0.71 hours after Bitcoin hit $69,000.
- Technical indicators suggested a further decline but a rebound might occur later.
Dan Gambardello, an analyst posted on his YouTube channel, that Cardano’s [ADA] decline on the 5th of March should not cause panic. According to Gambardello, the decline was necessary for ADA to achieve a higher price in the long term.
ADA’s price got close to $0.80 on the said date. But it was on the same day that Bitcoin [BTC] hit an all-time high of $69,000. Bitcoin could not hold the high for a long time and later nosedive to $61,000. However, the king coin was not the only cryptocurrency affected.
It’s a blessing in disguise
Like BTC, the Cardano native token tumbled. In the last 24 hours, AMBCrypto noticed that ADA had lost 7.84% of its value while trading at $0.71. For the analyst, the decline was normal as the token had the same experience in 2021 when Bitcoin hit an all-time high.
Gambardello added that, after this plunge, the price of ADA would rise much higher. The analyst’s opinion came off the back of a $3 prediction which he mentioned a few weeks back.
AMBCrypto also analyzed the liquidation Levels provided by HyblockCapital. According to the data, there was a cluster of liquidity from $0.77 and above, indicating that many positions were liquidated at that point.
For context, liquidation levels show the estimated price levels where the market might face large-scale wipeout.
Sometimes, this happens because of high leverage and extreme volatility. Other times, it could be due to insufficient margin balance to keep the positions open. Beyond the liquidation levels, we also considered the Cumulative Liquidation Levels Delta (CLLD).
Source: HyblockCapital
ADA’s decline is not over
At press time, the CCLD spiked in the negative direction. Since it occurred when ADA’s price experienced a sharp decline, it indicates that the trend could turn bullish. With this in place, late short positions could be punished as the price of Cardano might bounce off the lows soon.
In the meantime, the 4-hour ADA/USD chart revealed that bears pulled the price down to $0.71. However, the Bollinger Bands (BB) showed that volatility was high. Therefore, ADA might experience high price fluctuations.
If the price rebounds, ADA might extend to $0.80 in the short term.
However, the token might need to flip the resistance at $0.73 first. A successful breach might bring ADA closer to $1. But if the attempt fails, ADA’s price might fall back, and this time, it could slide below $0.70.
Source: TradingView
How much are 1,10,100 ADAs worth today?
In addition, the Chaikin Money Flow (CMF) reading fell. This decline implied that transaction volumes ending in gains for Cardano traders have been falling.
Should the reading continue to fall, then ADA might trend further down. But in the long run, the price of the token might climb higher depending on the market condition.
