Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
While the month of March brought forth a wave of surging prices, corrections soon set in, pushing the price of cryptocurrencies down the charts. With the said trend being witnessed by the Bitcoin market, the altcoin market too seemed to be showing signs of weakening, at press time.
With a market capitalization of $38.14 billion, Cardano recently became the third-largest cryptocurrency in the market. At the time of writing, ADA was stabilizing following its correction at $1.20.
Cardano hourly chart
Source: ADAUSD on TradingView
According to Cardano’s one-hour chart, even though the price of ADA moved within a tight range, the impact of the sudden corrections pushed it towards its support level. ADA’s price has been moving between $1.18 and $1.28 for the past couple of days, with the cryptocurrency’s charts witnessing the formation of a descending triangle.
Given the bearish pattern extending across the market, another price drop could be incoming for ADA.
Reasoning
Since the support level has been strong, the falling height of ADA’s price candlesticks seemed to highlight the market’s escaping bullishness. The convergence of the Bollinger Bands pointed to a fall in price volatility. Meanwhile, the Signal line and 50 moving average also moved above the price bars, underlining the emerging bearishness.
The Relative Strength Index was moving close to the oversold zone and was at 42 points, at the time of writing. This indicated that the selling pressure was a little high, with ADA’s dropping value aligning with this signal.
The market also noted some momentum in favour of the market’s bears rise. If the said momentum continues to rise, another drop could push the value of ADA towards its next support level.
Crucial levels to watch out for
Entry-level: $1.18
Stop-level: $1.23
Take profit: $1.09
Risk to Reward: 1.88
Conclusion
ADA’s one-hour chart indicated that the digital asset was registering a sloping price that was testing its press time support. If the crypto’s price fails to hold on to this level, the price of the digital asset may drop down to $1.07.
