- Cardano price closes the week with another loss on the books.
- ADA price looks set to choose more downside as investors are turning away from cryptocurrencies.
- Expect another drop with at least a retest at $0.415, possibly a selloff towards $0.075.
Cardano price is being dragged into the turmoil of cryptocurrencies losing their favorite status. They started to be deemed unreliable and too exposed to waves in financial markets. In the aftermath of the Terra LUNA massacre, the image of cryptocurrencies got severely damaged and has made retail investors and traders realize significant losses could be at hand if things really go south big time. With that in the back of their minds, Cardano price is set to enter another round of pain trades with a drop back to the low of last week near $0.415, and at risk of slipping 85% after that level towards $0.075.
ADA price at risk of turning into a penny stock trade
Cardano price is at critical risk of closing the week with yet another loss in the trading books. With a seventh consecutive week of losses, a turnaround does not seem to be anywhere near the vicinity. There are no fundamental support levels or elements bulls can hang on to for an entry and turnaround. Entering here would be foolish as stops and stop losses within the trade management would be too exposed for a squeeze.
ADA price instead looks set for at least a test to the downside towards $0.415, which has caught the falling knife on the previous week. It coincides with the S3 of last month and the S2 of May, making it a fascinating area for a possible handover of power from bears to bulls as the Relative Strength Index is nearing that low point before trading into oversold. Nonetheless, the risk could be that a technical break could trigger a fire sale at ADA price and run price action down towards $0.075, battering the cryptocurrency with over 85% of losses.
ADA/USD weekly chart
Sparking a turnaround could come from some broad and solid risk on, in the markets, as those heavy tail risks get deflated. For example, the Ukraine situation died a little bit in the background, with China succeeding in performing a soft landing for the economy. These elements could create a mild but longer-term tailwind for Cardano price and other cryptocurrencies as belief and trust are restored. Expect on the back of that for ADA price to pop back towards $0.715, break above the red descending trend line and rally back to $0.900 against the cap of the 55-day Simple Moving Average.
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