- Cardano price makes new low for 2022 on Wednesday.
- ADA price still trades in oversold mode but starts to flatline.
- Expect a swing back up to $0.265 soon under thin liquidity.
Cardano (ADA) price was having yet again another hangover on Wednesday, where equities were rallying but the tailwind refrained from spilling over to some cryptocurrencies. On the Relative Strength Index (RSI), ADA is still trading in an oversold area, but is starting to flatline. This could open a small window of recovery back to $0.265 by Christmas.
Cardano bulls are betting on the drop in liquidity
Cardano price bounced a little after it made new lows for 2022 but closed at the same low for the week, near $0.253. For the third time this week, the level holds at the close, and the RSI starts to flatline, pointing to a shift in sentiment in favor of the ADA bulls. With liquidity thinning out, any bullish move will be enlarged and will see a quick swing back higher.
ADA is thus set for at least a bit of recovery, although the first cap at the topside is difficult. Not only is that pivotal level near $0.265 a historical pivot from December 24, 2017, but it is also the monthly S1 support level that is now a resistance level. So to break that, quite a lot of pressure will need to be built. An extension of a big rally could possibly target $0.297 by New year, although that chance is fading by the day.
ADA/USD daily chart
During the ASIA PAC and European sessions, ADA has been trading near that same low near $0.253, where price action closed on Wednesday. The risk comes that if that level now breaks again to the downside, a daily close below it could trigger a sharp selloff towards $0.22 in search of the monthly S2 support level. That would mean that the Christmas rally will not come this year, and the outlook would look more negative for the start of 2023.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.