- Cardano price sinks over 5% after a firm rejection on the topside.
- ADA is digesting three rejections in a row as more downside looms.
- As long as important support holds, all is fine.
Cardano (ADA) price shows signs of distress and signals some issues ahead as a part of the rally is being pared back. Although only 10% of the 61% rally has been given back thus far, the way the fade is happening is a reason to worry. Where other cryptocurrencies have quite crucial support points nearby to underpin the price action, ADA is dangling and set to drop another 10% quite quickly if bulls cannot turn sentiment back in their favor.
Cardano price action proof of headaches ahead for next week
Cardano price carries the message “enjoy the party while it lasts” as it appears that it is soon time to pay the piper for this rally. After a staggering 61% rally from bottom to peak, the way the fade has behaved shows many signs of bearish behavior. After stretching to the top near $0.388, a very close rejection followed against $0.384. On Wednesday a rejection against the monthly R2 at $0.362 looks to be the next one.
ADA is thus unable to maintain its ground, and support seems to be breaking down, which makes this rally look rather like a house of cards. If this R2 persists in its resistance character, Cardano price will tank another 10% toward the low of January 17, 2021, which has been marked as an important area near $0.324. Should the central banks next week dampen the positive tone in the market and set the record straight that this bullish party is over, expect another tier lower with $0.297 as the best candidate for support with both the historical level and the 55-day Simple Moving Average coming in for support a touch higher near $0.300.
ADA/USD daily chart
The biggest binary element in this comes from the US Federal Reserve, which holds all the cards. Should the Fed come out supportive of the current rally and offer up only a 25 basi point hike or even no hike, expect markets to go all in on the Goldilocks scenario. Equities would shoot higher, and cryptocurrencies would see massive inflow, with ADA breaking above the 200-day SMA at $400 and sprinting higher rapidly.
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.