Can Cardano price bounce off its safety net to $1

Cardano price woes seem to be increasing since its all-time high in September 2021. The ADA bears have also pushed ADA below the buy zone, suggesting that the bears are in control. However, on-chain metrics suggest that a minor uptrend could be on the cards.

Cardano price continues to bleed

Cardano price has pulled a 180 as it undoes nearly all the gains witnessed since March 14. This downswing adds to ADA’s woes that have been ongoing since its all-time high at $3.10 on September 2, 2021. 

This long-lasting downswing also comes as a result of the market structure of the cryptos and the weakness in Bitcoin price. Adding credence to this thesis is the recent dip in Cardano price below the $0.875 to $0.955 buy zone.

While this outlook is bearish, ADA has one last chance to recover and attempt to flip the stiff resistance barrier at $0.973 into a support level. Interestingly, this level also coincides with the 50-day Simple Moving Average (SMA), making it a formidable level to breach. 

Until this significant barrier has been breached, investors can stop looking for a bullish outlook. However, if ADA bulls manage to produce a flip of the $0.973 hurdle into a foothold, there is still the 100-day SMA at $1.01 and the $1.09 blockades that need to be overcome. 

So, there is a good chance that Cardano price is likely to form a local top around the $1 psychological level or the $1.09 barrier. Any move beyond these levels is highly unlikely.

ADA/USDT 1-day chart

Supporting this outlook that a move beyond $1 is highly unlikely for ADA is IntoTheBlock’s Global In/Out of the Money (GIOM) model. This index shows that roughly 217,000 addresses that purchased nearly 24 billion ADA tokens between $0.92 to $0.97 are “Out of the Money.”

This on-chain metric suggests that the technicals are relatively more optimistic as they forecast a move to $1.01 or $1.09. 

ADA GIOM

On the off-chance that Cardano price fails to take off from the $0.875 to $0.955 buy zone, the downswing will continue until the retest of the range low at $0.776. This move, while bearish, is a good spot to accumulate for the long-term. 

If buyers fail to show up at $0.776 and ADA produces a daily candlestick close below this level, it will invalidate the ‘pause before a rise’ thesis by producing a lower low.