Cardano Update: ADA Faces Make-Or-Break Price Level For Bullish Revival
May 08 2024 - 8:30AM
NEWSBTC
The Cardano (ADA) price is down 46% since its yearly high and is
currently facing a make-or-break price level for a bullish
reversal. Here’s what you need to know: Cardano Price Analysis:
Daily Chart The daily ADA/USD chart is currently charting a path
within a descending channel, which has defined the bearish trend
since the beginning of March. On Monday, the ADA price peaked near
$0.475, encountering substantial resistance at the channel’s upper
boundary and from the critical 20-day Exponential Moving Average
(EMA), which stands currently at $0.47. In the short-term, this
resistance level is crucial as it coincides with historical price
rejection points, confirming its significance. As of press time,
ADA is trading at approximately $0.44. The convergence of the
20-day EMA ($0.47), 50-day EMA ($0.54), and 100-day EMA ($0.51)
above the current price level illustrates a dense zone of
resistance. The 200-day EMA at $0.52 reinforces this barrier,
emphasizing a strong bearish momentum. Related Reading: Cardano
(ADA) Trading Activity Goes Quiet: Will This Drag Down The Price?
The Relative Strength Index (RSI) on the daily chart is currently
at 38, which does not venture into the oversold territory (below
30) but indicates a bearish momentum with potential for further
decline unless a reversal occurs. For a bullish reversal, ADA needs
a sustained break above the $0.47 mark (20-day EMA) with
accompanying high volume to confirm the breakout from the
descending channel and shift the market sentiment. Then, the
cluster of EMAs becomes the central resistance zone. Crossing this
band is of utmost importance in order to build up bullish momentum
for a break above the yearly high of $0.81 from March. If not, the
ADA price could trend towards the midline of the channel and drop
below $0.40. In-Depth Weekly Chart Overview Transitioning to the
weekly chart, the broader picture also underscores the bearish
sentiment that has dominated ADA since it reached its peak at $3.17
in late 2021. The series of lower highs and lower lows is a
textbook representation of a downtrend. The price action currently
remains suppressed below the long-term moving averages: the 20-week
EMA at $0.52, 50-week EMA at $0.48, 100-week EMA at $0.51, and
200-week EMA at $0.52, all of which slope downwards, underscoring
the persistent selling pressure in recent weeks. Related Reading:
Crypto Analyst Says Cardano Bloodbath Far From Over, Sets Bottom
Price For ADA The Fibonacci retracement levels, drawn from the high
of $3.17 to the low of $0.22, provide further insights. Currently,
ADA trades near $0.44, which is above the major psychological and
technical support at $0.40. The closest significant Fibonacci
retracement level is the 0.236 level at $0.918, which ADA has
struggled to surpass. A breach above this level could open the path
toward higher Fibonacci levels at $1.348 (0.382) and $1.697 (0.5),
which would require a significant shift in momentum and buying
interest. Overall, for ADA to shift from its bearish constraints,
attention should be focused on the daily resistance at roughly
$0.47 (descending channel breakout). Overcoming this barrier would
be pivotal for confirming a bullish reversal. Until this level is
decisively broken with substantial volume, the outlook remains
tilted towards bearish continuation. Featured image from Bitget,
chart from TradingView.com
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