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Cardano: Despite demand at $0.4, here’s why ADA’s path to recovery seems bleak

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Cardano: Despite demand at $0.4, here’s why ADA’s path to recovery seems bleak

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

There have been some positive developments behind Cardano in the past few days. The Cardano community had voted on the Project Catalyst Fund seven back in March and will soon be voting on Fund eight. This venture will be used to develop the Cardano ecosystem, with a particular focus on the NFT arena.

Another bit of positive news was that, in April, addresses holding ADA rose to an all-time high of 5.2 million. Yet, there have been accusations leveled at Cardano for being a “ghost chain”.

On the charts as well, ADA fared poorly as the downtrend from November continued to persist.

ADA- 1 Day Chart

Source: ADA/USDT on TradingView

The falling wedge pattern appeared to see a breakout in mid-March, but this rally was unable to break a key level at the $1.26 mark. Sellers were emboldened by this development and were relentless since then, and managed to drive ADA as far south as $0.4.

At the time of writing, the entire crypto market saw a relief rally and ADA was one of the coins that posted double-digit percentage gains within a 24-hour span. However, the trend and market structure remain overwhelmingly bearish. The $0.8-$0.9 could offer opportunities to sell or to short.

Rationale

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Source: ADA/USDT on TradingView

The mid-March rally was the only time in 2022 where the RSI managed to stay above the neutral 50 line for more than a few days straight. Otherwise, the RSI was beneath this mark to signify the presence of a bearish trend. At the time of writing, the RSI was recovering from a drop to 24.24.

The Stochastic RSI also formed a bullish crossover in the oversold territory, in response to the bounce from the $0.4 mark. However, the OBV was in a free fall in recent days and showed no signs of recovery yet.

Conclusion

Buyers beware, as the trend favored the sellers. Winter had arrived months ago, and there were no signs of a thaw yet, let alone spring. The bearish structure would be broken if ADA can climb past the $0.9 mark, in which case the $0.6 and $0.78 levels could be retested as support.

Akashnath is a Chemical Engineering graduate deeply fascinated by Technical Analysis and the crypto markets and enjoys studying price movements and trying to find patterns.

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Is Cardano’s [ADA] rally probable yet? The answer might impress you

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Is Cardano’s [ADA] rally probable yet? The answer might impress you

Cardano’s [ADA] price has been under a strong bearish influence, especially since dropping from the vital $1.2-resistance. After falling below the 20 EMA (red) and 50 EMA (cyan), the altcoin was on a streak of liquidations while correlating with the broader sell-offs.

Altering the overall outlook was still a long shot for the bulls while they had to find renewed buying pressure to snap the constraints of the 23.6% Fibonacci resistance. At press time, ADA traded at $0.5307, down by 3.12% in the last 24-hours.

ADA Daily Chart

Source: TradingView, ADA/USDT

Aggressive sell-offs from the $1.2-ceiling resulted in a 67.35% drop from ADA’s April highs. As a result, after falling below its Point of Control (POC, red), ADA poked its 15-month low on 12 May. On its way south, the 61.8% Fibonacci level held up well after restricting the falling wedge breakout. While hampering the bear run, buyers finally induced a few green candles but failed to support it on elevated volumes.

Over the last six days, the altcoin saw an expected bearish pennant breakout as the price action approached the 23.6% level barrier. With an overextended gap between the 20 EMA and 50 EMA, the sellers exhibited their superior edge in the current scenario.

A continued revival from its immediate support could see an anticipated hurdle in the $0.59-zone near the 23.6% level. However, without sufficient volumes, the buyers would find it difficult to challenge the resistance offered by the alt’s near-term EMAs. The buyers would now aim to lower the gap between the 20/50 EMA in the coming days.

Rationale

Source: TradingView, ADA/USDT

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The Relative Strength Index suggested that sellers have a clear advantage in the current market structure. The buyers needed to push the RSI above the 38-level to propel a short-term rally beyond the 23.6% level on the charts.

An inability to pick Aroon up (yellow) from the zero-mark could lead to further undesired losses. AN eventual recovery from this level would open doorways for a smoother recovery. 

Conclusion

Looking at the current bounce-back from the $0.5-level, ADA could slam into the 23.6% level for testing its resistance. An eventual break above this level could pave a path to challenge the constraints of its near-term EMAs. But the threats along the Aroon up indicator could delay the potential of a bull run.

At last, ADA shares a high correlation with the king coin. Thus, traders/investors should keep a close watch on Bitcoin’s movement to make a profitable move.

With a background in financial analysis and reporting, Yash is a full-time journalist at AMBCrypto. He has a keen interest in blockchain technology, with a primary focus on technical analysis of cryptocurrencies.

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ada price prediction

Cardano [ADA] could bounce to $0.9 in the next few days only if…

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Cardano [ADA] could bounce to $0.9 in the next few days only if…

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

On shorter timeframes, announcements of technical improvements could be argued to have a positive impact on the price. A recent proposal to increase the block size of the Cardano mainnet appeared to be greeted by gains on the price chart of ADA. Data from Santiment showed that ADA was trading in an area where, historically, the price has rallied from. Could history repeat itself?

ADA- 1 Day Chart

Source: ADA/USDT on TradingView

Going back to early November and December, we can see a falling wedge pattern develop. In the months from November to March, the price has dropped beneath multiple levels of long-term horizontal support levels. The one that has been successfully defended was $0.78- but it could come under siege once again.

ADA was unable to rise past the $1.2 zone of supply, as the breakout from the wedge pattern failed to flip the long-term trend in favor of the bulls.

Now the question- Is Cardano being accumulated by the whales? Or, was the mid-March rally doomed to lose steam at the $1.2 area, before a resumption of the former downtrend? The indicators showed a bearish picture.

On the chart, the Bollinger bands indicator was quite wide to suggest volatility around ADA in recent weeks. Moreover, the price was beneath the 20-day moving average and showed that, in the next few days, a revisit to $0.9 could be a selling opportunity.

Rationale

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Source: ADA/USDT on TradingView

The past two months saw a bullish divergence over multiple days at the $0.78 support and a bearish divergence at the $1.2 level. These signaled the end of the prior bearish and bullish trends, respectively. At the time of writing, momentum was strongly bearish.

The Awesome Oscillator has been forming red bars on its histogram in the past three weeks to denote rising downward momentum. While the OBV did see an uptick in mid-March, it was not a particularly strong bounce. This showed that demand was rather weak.

Conclusion

Weak demand and rising bearish pressure could see ADA move toward $0.78 once again, although it could bounce to $0.9 in the next few days. However, a trend reversal signal was not in sight yet. There were no divergences, nor the arrival of high demand behind ADA yet.

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ada price prediction

Cardano: Buyers kiss toodles on the bulls’ cheek thanks to…

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Cardano: Buyers kiss toodles on the bulls’ cheek thanks to…

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

Cardano saw a huge spike in recent days in the “age consumed” metric. This meant that a large amount of ADA changed hands after being dormant for a long time. This could be a bullish development for Cardano. However, the price action showed that the market structure was bearish.

ADA- 1 Day Chart

Source: ADA/USDT on TradingView

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The falling wedge pattern (white) was also a period where ADA was in a strong downtrend. The recent lower highs of that downtrend area were at $1.01 and $1.26. In the past month, the $1 level was broken but the $1.26 was not.

Moreover, the price has dropped below $1 once more. On lower timeframes, $1.1 was an important level that, once broken, pushed ADA into a bearish trend once again.

The breakout from the wedge pattern did not see ADA climb above $1.26, and moreover, the momentum and structure at press time were bearish. This suggested that ADA could dive further in search of demand.

Rationale

Source: ADA/USDT on TradingView

The RSI rose strongly above neutral 50 in March’s rally, but that rally was not sustained. Instead, the price and its RSI both fell and showed strong bearishness. The RSI stood at 38 and has been beneath the neutral 50 line in the past two weeks to show a bearish trend.

The OBV has also been in a downtrend in recent months. There was not a strong enough uptick to show a reversal to a bullish trend on the OBV, which has been slowly dropping in the past month. The DMI also showed a strong bearish trend in progress, with the ADX (yellow) and the -DI (red) above 20.

Conclusion

Cardano has a bearish market structure on higher timeframes after the move above $1.2 failed and saw bears seize control of the market. On lower timeframes, $1.1 and $0.98 had also been retested as resistance. Over the next week or two, ADA can be expected to descend toward the $0.78 support zone.

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Akashnath is a Chemical Engineering graduate deeply fascinated by Technical Analysis and the crypto markets and enjoys studying price movements and trying to find patterns.

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