Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
While Cardano’s price did record substantial gains over the course of 2021, the coin’s price action over the past month has been mostly sideways. This has forced ADA to remain highly rangebound, while also being susceptible to price corrections when the bullish momentum in the market dries up.
At the time of writing, ADA was trading at $1.19 without much change in its value over the past few days. ADA had a market capitalization of over $38 billion, making it the fifth-largest cryptocurrency according to CoinMarketCap.
Cardano 1-day chart
Source: ADA/USD, TradingView
Cardano’s price has remained extremely rangebound over the past few days. This has been the case ever since the coin breached the $1.5 level and at the time of writing, the altcoin was still trading between its immediate resistance at $1.41 and its support at $1.13. If the bullish momentum fades away completely in the coming days, then the strong support range between $1.13 and $0.94 is likely to stabilize the cryptocurrency’s price.
At the moment given the market conditions, it is hard to tell whether short or long positions would benefit traders. However, it is to be noted that given past precedents, the coin may end up trading sideways over the coming week or see a minor correction in which the price may move into the support range mentioned earlier.
Rationale
The technical indicators for ADA gave a split verdict. The MACD indicator suggested slight bearishness in ADA’s market after having undergone a bearish crossover. The RSI indicator continued to trade within the neutral zone, but it was moving in the direction of the oversold zone. If this continues, once the bullish momentum fades, ADA may be vulnerable to a price correction once again.
Conclusion
The price of ADA has been undergoing a prolonged period of consolidation and this is likely to continue in the coming week. ADA’s long-term prospects may also involve a slight price correction if the coin fails to garner adequate bullish momentum over the next few days. At the moment, traders can expect the price to continue moving rangebound between the $1.1 to $1.4-levels, but a breach past the upper limit would be unlikely.
