Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Cardano has been in the news lately thanks to the steps it’s taking towards the Alonzo update. Alonzo is one in a series of updates to the blockchain, one that will bring features like smart contracts to the platform.
While Cardano is now moving to compete with the likes of Ethereum, ADA itself has not yet responded in favor of the upcoming updates thanks to wider corrections in the market.
Cardano daily chart
Source: ADAUSD on TradingView
Cardano was seeing strong recovery on the price charts earlier this week, however, as the weekend approached, the selling pressure began to rise. As the price rejected the resistance level at $1.86, the value of ADA fell to the support level at $1.43.
With the selling pressure continuing to rise at press time, a move to $1.43 could result in a further fall of 10%.
Reasoning
Despite strong efforts to recover in the bearish market, ADA’s price failed to breach the resistance at $1.86. The crypto’s volatility has remained high and as per the Visible Range indicator, the highly traded range in the ongoing period was $1.30. This level has acted as support in the past and could rescue the alts’s falling price.
However, the Relative Strength Index seemed to suggest that the ADA market was moving away from equilibrium as selling pressure was increasing. This downtrend of the market could lead to the value collapsing to $1.30.
Meanwhile, the ADX’s value was above 25 and suggested that the current strength was being supported and could lead to a price swing.
Crucial levels to watch out for
Entry-level: $1.44
Take Profit: $1.30
Stop-level: $1.51
Risk to Reward: 2.09
Conclusion
Although the first Cardano Alonzo testnet has just been launched, the market has not responded to the news yet. The bearishness of the Bitcoin market has instead seeped in and ADA was witnessing a strong sell-off for the second consecutive day. If this continues, ADA’s price could drop to $1.30.
