- Cardano risks an extensive breakdown after rejection from highs close to $1.
- The IOMAP reveals increased resistance likely to sabotage recovery.
- ADA will resume the uptrend if it closes the day above the ascending channel’s lower edge.
Cardano seems to have abandoned the mission to lift off to the record highs at $1.4 amid rising selling pressure. The failure to break above $1 called out to sellers to increase their positions. Holders of ADA could also be selling to take profit amid the dwindling hope of swinging to the all-time highs.
Cardano commences the gains-trimming exercise
Over the last few days, Cardano bulls have focused on securing higher support. However, selling pressure has continued to intensify, making their goal unachievable. The aspiring smart contract token is trading at $0.865 at the time of writing amid a worsening short-term technical picture.
The Relative Strength Index (RSI) on the 4-hour is falling sharply after rejection from the overbought area. Sliding below the midline signifies that the bears’ grip is much stronger. Moreover, the Moving Average Convergence Divergence (MACD) reinforces the breakdown. The trend will remain unchanged as long as the MACD line (blue) stays beneath the signal and the indicator slides below the midline.
ADA/USD 4-hour chart
The TD Sequential indicator recently presented a sell signal in the form of a green nine candlestick on the same 4-hour chart. The call to sell seems to have been validated, which adds credence to the bearish picture. If support at $0.8 fails to hold, Cardano will be on the path to a breakdown eyeing the 100 Simple Moving Average on the 4-hour chart.
ADA/USD 4-hour chart
The IOMAP model by IntoTheBlock validates the bearish outlook. Massive seller congestion zones ahead of Cardano mean that recovery will take longer or fail to occur. The most robust resistance lies between $0.88 and $0.9. Here, roughly 31,000 addresses had previously bought around 2.8 billion ADA.
On the downside, the model clearly shows that Cardano is vulnerable to declines due to the absence of intense support levels. However, an area that may absorb the selling pressure runs from $0.82 to $0.85. Here, 29,600 addresses are profiting from roughly 848 million ADA purchased in the range.
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Cardano IOMAP model
Looking at the other side of the picture
The uptrend to record highs at $1.4 will come into the picture if Cardano closes the day above the ascending channel’s lower boundary. A significant bullish move is stepping above the middle layer of the channel. This will allow the bulls to focus on breaking the critical hurdle at $1 and securing the path to all-time highs.
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