Cardano Market Update: ADA/USD flashing massive selloff signs

Cardano rallied incredibly in the first week of July even hitting a two-year high at $0.1386. The tremendous price action was attributed to increased investor interest following the launch of Shelly mainnet. Cardano’s dominance in the market grew significantly, rising to the sixth position on CoinMarketCap.

Investors’ interest has sustained despite the drab and consolidation technical pictures across the market. This is probably due to the soon to launch public staking for ADA. Users of Cardano will have the opportunity to lock their ADA tokens in the network and earn passive income rewards. Staking is used by Proof-of-Stake (PoS) protocols to secure the network and ensure optimum operation.

Cardano is trading at $0.13 at the time of writing. In the last few days, attention shifted to defending initial support at $0.12. Still holding ground is the trendline support as well as the 50 SMA in the 4-hour range.

For now, consolidation is the dominant picture. Sideways trading action is likely to take precedence in the coming sessions. The RSI, for instance, is holding above the average while moving horizontally. On the other hand, the MACD features a minor bearish divergence which highlights the increasing seller grip.

In addition, the formation of a rising wedge pattern jeopardizes ADA/USD position above $0.10. If the triangle support gives into the selling pressure, Cardano could spiral and first test the tentative support at $0.11 before extending the leg lower under $0.10.

ADA/USD 4-hour chart