- Cardano hunts for support after rejection from highs slightly below $1.
- On-chain analysis reveals that recovery will not be a walk in the park.
- ADA will have to reclaim the 50 SMA support on the 4-hour chart to renew the uptrend.
Cardano has recently traded a new yearly high of $0.99, cutting short the rally toward all-time highs. Selling pressure continued to rise due to the failed breakout at $1. ADA also lost several tentative support areas, including $0.9 and $0.8. Meanwhile, losses are likely to continue amid rising overhead pressure.
Cardano’s reverse gears engaged
The 4-hour chart illustrates a worsening technical picture for the aspiring smart contract token. For instance, the 50 Simple Moving Average support has been lost, adding credibility to the bearish outlook. On the downside, the nearest substantial support lies at the 100 SMA near $0.4.
Similarly, the Moving Average Convergence Divergence (MACD) on the same 4-hour chart is also sending bearish signals. The MACD is a trend indicator that doubles up as a momentum measuring tool. Declines became apparent after the MACD line (blue) crossed below the signal line. As long this technical picture remains the same, Cardano will struggle with recovery while sellers become stronger.
ADA/USD 4-hour chart
The IOMAP model by IntoTheBlock shows that resistance is intense ahead of Cardano. It is doubtful that the buyers will slice through the most robust resistance zone running from $0.86 to $0.88. Here, nearly 66,600 addresses had bought roughly 4.2 billion ADA.
On the flip side, smaller support areas have manifested to anchor Cardano. This means that if overhead pressure increases, the freefall might be unstoppable. However, the IOMAP brings our attention to the region running from$0.79 to $0.81. Here, about 28,000 addresses are profiting from the approximately 883 million ADA bought in this zone.
-637491356970778045.png)
Cardano IOMAP model
Looking at the other side of the fence
If ADA recovers and closes the day above the 50 SMA on the 4-hour chart, the pessimistic outlook will be thrown out the window. Moreover, trading above the trendline resistance observed on the chart will encourage more buyers to join the market as they anticipate the ultimate liftoff above $1.
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.
Recommended Content
Editors’ Picks
PancakeSwap loses nearly 3% value intraday as the DEX crosses $1 billion in trade volume
Decentralized exchange (DEX) PancakeSwap (CAKE) announced in an official tweet that it has crossed $1 billion in trade volume on the Layer 2 chain, Base. CAKE on-chain metrics support the thesis of a recovery in the DEX token’s price.
Shiba Inu hits new milestone, over $9 billion worth of SHIB tokens burnt
Shiba Inu (SHIB), the second-largest meme coin in the crypto ecosystem, recently hit a milestone in the volume of tokens burned. Shiba Inu has burnt over 410.72 trillion SHIB tokens since the inception of the burn mechanism in the project, worth over $9 billion.
Dogwifhat crashes 60%, but here's why you should not buy WIF yet Premium
Dogwifhat (WIF) price shows a slowdown in the bearish momentum as it sets up a potential range. This development could lead to a good buying opportunity from a long-term perspective.
XRP struggles to overcome $0.50 resistance, SEC vs. Ripple could enter final pretrial conference
XRP is struggling with resistance at $0.50 as Ripple and the US Securities and Exchange Commission (SEC) are gearing up for the final pretrial conference on Tuesday at a New York court.
Bitcoin: BTC’s rangebound movement leaves traders confused
Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established.