Over the past few days, the price of Cardano has been in a downward trend. This has led to the strengthening of bearish sentiment. In the last 24 hours, ADA experienced a dip of approximately 4.2%. Over the past week, the altcoin depreciated by close to 10%.
These price fluctuations have raised concerns about investors’ interest in Cardano. The same is reflected in the low buying strength and accumulation observed on the charts. Cardano finds itself trapped within a range, lacking a clear price direction, gradually eroding buyer confidence.
The bears have gained strength, causing an important support level to be breached and subsequently transforming into a resistance level for the altcoin. For Cardano to regain its previous price ceiling, buyers must reenter the market.
Furthermore, the broader market conditions, including Bitcoin’s consolidation around the $27,000 zone, have prevented many major altcoins, including Cardano, from surpassing their immediate resistance levels. For ADA to overcome its nearest resistance, it relies heavily on the market’s overall strength. There has been a decline in market capitalization, further emphasizing the increase in selling strength.
Cardano Price Analysis: One-Day Chart
At the time of writing, the price of ADA stood at $0.35, and it is approaching a significant local support level that has played a crucial role in the past.
The closest support line is $0.34, while the overhead price ceiling is $0.36. The altcoin’s ability to reclaim the resistance level largely depends on the bulls’ ability to defend the price above the immediate support level.
If the current level experiences a decline, the coin is likely to first drop to $0.34, and if the selling pressure persists, it may further decline to $0.33. It’s worth noting that the volume of Cardano traded during the last session has decreased, indicating a decline in buying strength.
Since ADA dropped below the $0.38 price level, its buying strength has failed to rebound. The Relative Strength Index (RSI) is below the 40-mark, indicating that ADA is nearing oversold territory on the daily chart.
Furthermore, the asset’s price has fallen below the 20-Simple Moving Average line, which suggests that sellers have taken control of the market’s price momentum.
ADA has generated sell signals based on various indicators, suggesting a possible decline in price. The Moving Average Convergence Divergence (MACD) indicator, which reveals price momentum and reversals, displayed red histograms associated with sell signals for the altcoin.
Furthermore, the Directional Movement Index (DMI), responsible for indicating price direction, showed a negative trend with the -DI line (orange) positioned above the +DI line (blue). This implies a bearish sentiment in the market.
The Average Directional Index (ADX) also attempted to move above the 20 mark. However, it indicates a lack of strength in the current price trend.
Featured Image From UnSplash, Charts From TradingView.com