Cardano might be set to fall to this level over the next few days
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
We are halfway through July, and a majority of the price action has been bearish for Cardano. The crypto-asset started the month above $1.45 but since then, it has been on a consistent decline. With on-chain activity picking up speed, the alt’s price had been consolidating above $1.30 for a few days. However, over the past week, it has been falling sharply once again.
At press time, Cardano was still the 5th largest cryptocurrency in the market with a market cap of $39.3 billion.
Cardano 4-hour chart
Since the first week of July, Cardano has been oscillating within the trendlines of a descending channel. While the market structure seemed to be indicating a potential bullish breakout, there was unlikely to be one over the next few days as the price continued to descend under the medium value of the channel. The relationship between the 20-EMA and 20-SMA was also fairly bearish at press time, as the blue line continued to remain above the orange line.
The $1.285 resistance level needs to be breached before any bullish arguments can be made. At the moment, however, considering the crypto’s lower volumes, the alt’s price may hit the $1.195 support from before.
Cardano’s correlation with Bitcoin has played a major factor during this rally as the BTC-ADA index rose on the charts. With respect to present market indicators, the Relative Strength Index or RSI seemed to be underlining strong bearish pressure as a reset of the oversold region was evident.
The MACD pointed to a continuation of the bear market, at press time, as the MACD line continued to hover over the Signal line.
Finally, On-balance Volumes were still slowly reducing – A sign of regular selling volumes from ADA holders.
Finding the bottom?
After last week’s bearish close, it is difficult to gauge the immediate bottom for Cardano. However, the asset can be expected to drop down to $1.19-$1.10 over the next few days.