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Cardano: Buyers kiss toodles on the bulls’ cheek thanks to…

2min Read
Cardano headed back toward $0.8 lows after failed breakout on the charts

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

Cardano saw a huge spike in recent days in the “age consumed” metric. This meant that a large amount of ADA changed hands after being dormant for a long time. This could be a bullish development for Cardano. However, the price action showed that the market structure was bearish.

ADA- 1 Day Chart

Cardano headed back toward $0.8 lows after failed breakout on the charts

Source: ADA/USDT on TradingView

The falling wedge pattern (white) was also a period where ADA was in a strong downtrend. The recent lower highs of that downtrend area were at $1.01 and $1.26. In the past month, the $1 level was broken but the $1.26 was not.

Moreover, the price has dropped below $1 once more. On lower timeframes, $1.1 was an important level that, once broken, pushed ADA into a bearish trend once again.

The breakout from the wedge pattern did not see ADA climb above $1.26, and moreover, the momentum and structure at press time were bearish. This suggested that ADA could dive further in search of demand.

Rationale

Cardano headed back toward $0.8 lows after failed breakout on the charts

Source: ADA/USDT on TradingView

The RSI rose strongly above neutral 50 in March’s rally, but that rally was not sustained. Instead, the price and its RSI both fell and showed strong bearishness. The RSI stood at 38 and has been beneath the neutral 50 line in the past two weeks to show a bearish trend.

The OBV has also been in a downtrend in recent months. There was not a strong enough uptick to show a reversal to a bullish trend on the OBV, which has been slowly dropping in the past month. The DMI also showed a strong bearish trend in progress, with the ADX (yellow) and the -DI (red) above 20.

Conclusion

Cardano has a bearish market structure on higher timeframes after the move above $1.2 failed and saw bears seize control of the market. On lower timeframes, $1.1 and $0.98 had also been retested as resistance. Over the next week or two, ADA can be expected to descend toward the $0.78 support zone.

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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.
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