Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Cardano exhibited a bearish market structure on the daily timeframe.
- Despite the losses since mid-April, the larger picture view suggested ADA could push toward $0.5 later this year.
Bitcoin’s [BTC] dominance rose slowly over the past two months, from 46.7% in early April to 48.01% at the time of writing. Yet, the price of the king coin has dropped by 3.3% since then. This suggested that the altcoin market has experienced greater losses than BTC.
Realistic or not, here’s ADA’s market cap in BTC’s terms
Therefore, altcoin investors could stand to lose heavily in the event of another move downward for Bitcoin. This threat is something that Cardano [ADA] investors must acknowledge. On the price charts, ADA bulls faced resistance near $0.38.
Cardano buyers hold on resolutely to the $0.36 support
Source: ADA/USDT on TradingView
Over the past month, Cardano has traded within the $0.36 and $0.38 levels. On the daily timeframe Cardano witnessed a bearish market structure after the bears forced prices beneath the $0.38 mark in early May.
The RSI hovered around the neutral 50 mark at the time of writing. It has not spent a considerable amount of time below the 40 value in May, which showed that there was no strong downtrend in May, although momentum favored the sellers.
Taken together with the price action, the higher timeframe trend was bullish. The rallies in January and March were followed by pullbacks of 27% and 22%, respectively. Therefore, the consolidation above $0.36 could be part of a higher timeframe uptrend. However, bulls must be cautious until the $0.38-$0.4 resistance zone was broken.
In the event of an uptrend, bulls can target $0.48 and $0.56 to book profits at. The trend of Bitcoin could have a major impact on ADA.
Selling pressure stepped in after an accumulation phase in the first half of May
Source: Santiment
The data from Santiment showed that huge amounts of ADA tokens moved between addresses in April and May. The spike on 19 May denoted 720 million tokens transferred and represented a six-month high. Large spikes in this metric generally coincide with a sharp wave of selling.
How much are 1,10,100 ADAs worth today?
The retracement in mid-April was accompanied by a surge in dormant circulation. However, the early March ones were close to the local bottom for Cardano on the higher timeframes. It was unclear which case it would be for Cardano.
The mean coin age saw a steep ascent earlier this month, but stalled just two weeks later. This showed accumulation in early May, followed by a phase where neither buyers nor sellers had a clear superiority. The MVRV ratio suggested ADA was undervalued, and that holders were at a loss.
