Cardano price cannot handle the spotlight, back below $1.40 with risk building
- Cardano price closed last week with a -7.74% decline and, more importantly, back below the 2018 high of $1.40.
- Today, the green token is showing the highest daily volume since June 25.
- ADA 200-day simple moving average (SMA) at $1.10 may offer support if selling pressure accelerates in the cryptocurrency market.
Cardano price broke away from a bearish rising wedge pattern on June 8 with a -5.45% loss and a daily close below the 2018 high of $1.40. It was a quick reversal of fortune for ADA after finally recapturing $1.40 on July 3. As before, without a daily close above $1.40, the altcoin is vulnerable to test the 200-day SMA or the June 22 low.
Cardano price so close and yet so far from shining again
From the June 22 low until July 7, Cardano price orchestrated a rebound that culminated in a bearish rising wedge pattern that successfully triggered on July 8, taking ADA below $1.40 after five consecutive days of holding the crucial level. The inability to assert relative strength in a demanding market environment reflects a diminished interest in the ‘green story’ of Cardano.
The measured move price is the low of the wedge formation at $0.99, representing a 24% decline from the current price. A daily close below the July 1 low of $1.21 would be the additional confirmation needed for a bearish outcome for Cardano price.
The only credible ADA support below $1.21 is the 200-day SMA at $1.10 and the 61.8% Fibonacci retracement of the 2020-2021 advance at $1.00. If the June 22 low fails to hold, other significant support points include the May 19 low of $0.92 and the April 23 low of $0.89. There are no support levels of interest on the weekly chart until the 50-week SMA at $0.72.
ADA/USD daily chart
A bullish ADA outlook only begins with a daily close above $1.40, and for the more cautious market operators, a weekly close above $1.40. If successful, Cardano price will strike serious resistance at the 50-day SMA at $1.47, the February 27 high of $1.54 and the April 14 high of $1.57.
As a Proof of Stake (PoS) blockchain platform, Cardano energy needs are notably lower than the Proof of Work (PoW) Bitcoin platform, thus positioning ADA as a green token and an environmental leader in the blockchain space. However, Cardano price has not responded positively to the spotlight, fluctuating in line with the broader market. Until a semblance of relative strength can be sustained, the digital asset is no better investment option than most cryptocurrencies.
Author
Sheldon McIntyre, CMT
Independent Analyst
Sheldon has 24 years of investment experience holding various positions in companies based in the United States and Chile. His core competencies include BRIC and G-10 equity markets, swing and position trading and technical analysis.
