• Cardano price faces two crucial hurdles at $1.20 and $1.24, suggesting further upside is unlikely.
  • Investors can expect ADA to retrace roughly 15% and revisit the $1 psychological barrier.
  • A four-hour candlestick close above $1.24 will invalidate the short-term bearish thesis.

Cardano price has breached its consolidation range but is struggling to head higher. The presence of a resistance confluence makes this run-up an arduous task for bulls.

Cardano price breaks free but for the worse

Cardano price traded between the $1.12 and $1 barrier for roughly two weeks, signaling a consolidation. On February 5, ADA breached through this sideways movement and produced a swing high above $1.12, flipping into a support floor.

Cardano price faces two critical hurdles as it trades above $1.12 - the weekly resistance barrier at $1.20 and the 50-day Simple Moving Average (SMA) at $1.24. Hence, the chances of an upswing are considerably less. 

Therefore, investors can expect Cardano price to face rejection at either of the two barriers and retrace lower. A failure to breach the 50-day SMA at $1.24 could lead to a 15% downswing to the daily support level at $1. This barrier served as a support platform for the run-up in mid-2021 that pushed ADA to $3. Hence, this stable support floor is where the downside could be limited. 

ADA/USDT 4-hour chart

ADA/USDT 4-hour chart 

Supporting this downward movement for Cardano price is IntoTheBlock’s Global In/Out of the Money (GIOM) model. This on-chain index shows that the immediate support level for ADA is non-existent and that a stable one is present at $1.03, further adding credence to the short-term bearish thesis. Therefore, investors can expect ADA to find a firm footing around this barrier where roughly 448,830 addresses that purchased 7.78 billion ADA are “In the Money.” 

ADA GIOM 

ADA GIOM 

Another reason why a bullish thesis Cardano price is unlikely is due to the decline in the number of large transactions from 5,100 to 4,900. This 3.9% drop, which serves as a proxy of their 

investment thesis, indicates that they are not interested in ADA at the current levels.

ADA large transactions

ADA large transactions

All in all, Cardano price seems ready for a quick leg down to $1, a crucial psychological level. This bearish outlook can be side-stepped if ADA bulls can produce a four-hour candlestick close above $1.24. 

Doing so will allow Cardano price to have a free reign up to $1.45 or a 17% upswing. The upside seems to be limited at $1.45, which is a confluence of the weekly resistance barrier and the 100-day SMA.

 


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.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Ripple extends gains by 5% on Friday as CEO hints at institutional crypto products with CME XRP-Dollar index

Ripple extends gains by 5% on Friday as CEO hints at institutional crypto products with CME XRP-Dollar index

Ripple (XRP) traders’ sentiment turned positive on Friday, as CEO Brad Garlinghouse highlighted the addition of XRP-Dollar reference rate and indices to the CME Group and CF Benchmarks. 

More Ripple News

Worldcoin crumbles under selling pressure even as OpenAI eyes human-level problem-solving

Worldcoin crumbles under selling pressure even as OpenAI eyes human-level problem-solving

OpenAI, the American tech firm behind the Large Language Model ChatGPT, announced five levels towards building an Artificial General Intelligence (AGI). Employees at the firm told Bloomberg that with ChatGPT, Open AI is currently at level one. 

More Worldcoin News

VeChain break above descending trendline sparks rally speculation

VeChain break above descending trendline sparks rally speculation

VeChain price breaks above the descending trendline, suggesting a bullish move. Sideline buyers can accumulate VET between $0.0247 and $0.0239. A daily candlestick close below $0.0204 would invalidate the bullish thesis.

More VeChain News

Bitcoin Weekly Forecast: Investors wonder if BTC troubles are behind

Bitcoin Weekly Forecast: Investors wonder if BTC troubles are behind

Bitcoin (BTC) stabilized around the $57,000 mark this week, while the German Government persists in transferring Bitcoin to exchanges. Concurrently, US spot Bitcoin ETFs have recorded inflows. 

More Bitcoin News

Bitcoin: Investors wonder if BTC troubles are behind

Bitcoin: Investors wonder if BTC troubles are behind

Bitcoin (BTC) stabilized around the $57,000 mark this week, while the German Government persists in transferring Bitcoin to exchanges. Concurrently, US spot Bitcoin ETFs have recorded inflows. On-chain analytics indicate that whales are accumulating BTC during dips, potentially foreshadowing an imminent rally in the days ahead.

 

Read full analysis

BTC

ETH

XRP