- Cardano price sees bulls unable to hold price action above monthly S1 support at $0.60.
- ADA price could fall back into the distribution zone between $0.47 and $0.50.
- Downside risk comes from the distribution zone becoming exhausted by buyers, with a break lower inevitably testing the $0.383 low.
Cardano price (ADA) sees price action turning 180 degrees on Monday after a series of harmful data points from China put cryptocurrency traders back in a negative mood . To make matters worse, more and more big names are entirely pulling out of Russia, with Mcdonald's as one of the latest amongst them. All these elements are weighing on global growth and global risk sentiment, making it very hard for cryptocurrencies to have any tailwinds, and could spell another 32% drop for ADA.
ADA price could undergo another 32% correction
Cardano price has issues respecting support this morning, as a pure technical play would likely see price open and return to the monthly S1 around $0.60 this morning, to then bounce and rocket higher towards $0.687. Instead, price action broke through the monthly S1 after a slew of negative economic data out of China put investors on edge on the first trading day of a new week. Adding to the negative sentiment, Mcdonald's announced it would cancel and exit all operations in Russia, meaning a severe write-off and downward forecast for earnings in the coming quarters. Tail risks are only being added, with almost none fading to the background, setting the scene for ADA to see investors exit even quicker.
ADA price is thus on the back foot together with the whole cryptocurrency asset class. Expect to see losses dug out even further towards $0.47, which is the low end of a distribution zone. With investors turning their back on cryptocurrencies, expect to see a nosedive to below $0.47, and then towards $0.38, with at least a retest on May 12.
ADA/USD daily chart
With all these key events already happening on the week's first trading day, the news flow could start to quiet down and open a window of opportunity for some recovery. ADA price could climb back above the monthly S1 and breakthrough $0.687. From there, the next profit level is set at $0.915, with the 55-days Simple Moving Average cap hanging above there.
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