- Cardano saw a bearish market structure break days before BTC’s downturn.
- Liquidation levels showed a bullish reversal could occur next week.
Cardano [ADA] bulls tried valiantly to drive prices higher but the crypto market had other ideas.
A Bitcoin [BTC] rejection at the $70k resistance on Monday, the 29th of July, was followed by an 8.37% price drop and was trading at $64k at press time. Like many of the major altcoins, ADA also suffered.
Its market structure on the daily timeframe has been bearish since last week after falling below $0.4145. The recent market-wide losses strengthened the bearish position.
Cardano has been bearish even before the recent price drop
Source: ADA/USDT on TradingView
The falling wedge pattern (orange) saw a bullish breakout in mid-July. The buyers briefly flipped the $0.4 zone to support but prices fell below it just a few days later, on the 25th of July. The OBV has been in a steady downtrend since April.
The MACD climbed above neutral 50 when prices rose above $0.4, but formed a bearish crossover soon after. This momentum shift combined with a lack of buying pressure meant that ADA is likely to slowly slip toward the local lows at $0.34.
A range formation in the $0.34-$0.4 region over the next few weeks, alongside a rising OBV would be a sign of accumulation.
A Cardano price reversal could be imminent
Source: Hyblock
The 1-month look back liquidation heatmap showed that the $0.378 was a sizeable liquidity pool. It has attracted ADA to it, which meant the local bottom is nearby. A similar price action unfolded in the final week of June.
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A dip below $393 to $0.383 before a bullish rebound was seen back then. Bulls can be hopeful of a similar scenario unfolding next week, provided Bitcoin is able to defend the $64k support zone.
The target for such a reversal would be $0.432.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
