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Cardano can see accelerated losses after losing this key short-term support

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Cardano can see accelerated losses after losing key short-term support

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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 dropped to $0.35 but was able to manage a bounce
  • This bounce was short-lived, and another 5% drop looms for ADA

The previous day of trading saw Bitcoin [BTC] face resistance at $19.6k and drop to $19.2k at the time of writing. Short-term support at $19k looms for the king of crypto. Unlike Bitcoin, which has displayed a relatively neutral trend since Monday, Cardano [ADA] was more bearish. From the highs of 17 October, ADA lost nearly 5%.


Here’s AMBCrypto’s Price Prediction for Cardano [ADA] for 2022


More losses could follow. To the south, some support levels and Fibonacci extension levels were plotted, and ADA short-sellers can use these to take a profit.

Fibonacci extensions can come into play as ADA falls below $0.358

Cardano can see accelerated losses after losing key short-term support

Source: TradingView

After the CPI announcement and the bounce that followed the previous week, Cardano resumed its southward movement on the price charts. It has to be noted that this bounce did not manage to break the higher timeframe market structure, which has remained bearish since mid-September.

A set of Fibonacci retracement and extension levels were plotted (yellow) based on ADA’s bounce. At the time of writing, the 78.6% retracement level at $0.358 was breached as a support level. This highlighted the strong downtrend. The Relative Strength Index (RSI) was also well below the neutral 50 mark to show short-term momentum was bearish.

A retest of the $0.358-$0.36 area can be retested as resistance in the coming hours. However, the downtrend was likely to continue for Cardano. The On-Balance Volume (OBV) was also in a downtrend in recent weeks, and signaled that the selling volume has steadily outweighed the buying pressure.

$0.34 and $0.335 could see a bounce for ADA.

30-day MVRV in negative territory

Cardano can see accelerated losses after losing key short-term support

Source: Santiment

The Market Value to Realized Value (MVRV) ratio was also in negative territory and falling. This indicated that holders of the coin were at a loss, and also outlined the inherent fear in the ADA market. A move back above $0.38 and $0.43 could bring the 30-day MVRV to positive. In mid-July, for instance, the MVRV climbed steadily in response to a rally in the prices.

Bitcoin was at a precarious support level yet again, and the higher timeframe trend favored ADA sellers. Only a brave Cardano investor would bet on the short-term price charts seeing a sharp reversal.

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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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