Disclaimer: The findings of the following article are the sole opinions of the writer and should not be taken as investment advice
The short-term market has been seeing a constant chase between continuous troughs and crests on the charts. While the momentum in the spot market was high, the long-term appeared to be calmer for most of the market. What’s more, as Bitcoin consolidated, altcoins like Cardano might also embark on a consolidation phase soon.
Cardano daily chart
Source: ADAUSD on TradingView
Cardano rejected its resistance at $1.86 twice and trended lower on the charts. The asset’s price was falling within a descending channel when the price broke higher and pushed it back up. The nearly 25% breakout pushed ADA’s value to $1.64, but after some corrections, it was trading at $1.50, at press time.
The crypto-asset may continue to trade at this level for a while, but there was bearishness emerging in the market.
Reasoning
As the price surged to $1.64, the local resistance did not allow the price to breach this level. As trading remained restricted between $1.50 and $1.64, the market’s traders were getting anxious to sell before another drop.
Cardano’s market, at press time, was seeing a trend reversal in progress. The Stochastic RSI was crossing under the Signal line, a finding which meant that selling pressure was rising across the market. Once the crossover is complete, the price may be pushed down to $1.39.
Meanwhile, the MACD indicator suggested that ADA was at the end of a bearish trend in early June. However, the histogram was retracing at the time of writing, a sign of buyers trying to hold up the price and support consolidation on the charts.
Conclusion
With Cardano trading at the aforementioned price level, the 50 Moving Average moved well above the price bars. This was the beginning of southbound pressure in the ADA market and if the buyers fail to hold on to the said level, the price might head down to $1.39.
