Technical indicators show Cardano price is weakening, increasing risk of steep correction

Cardano (ADA) price is trading heavily in the ASIA PAC session after ECB’s Lagarde disappointed investors and triggered a chain reaction that led to a massive wave of dollar strength rolling through markets. At-risk are the gains of June, which could be fully pared back. In case negative sentiment continues into the weekend, and next week, even the gains from May could be history with 37% losses on the books.

ADA price is at risk of erasing both June and May’s profit

Cardano price sees bulls fleeing the scene as price action gets rejected at $0.69 and the 55-day Simple Moving Average. In fact ADA price retreated a few cents before the level, and today lost grip of the monthly pivot at $0.64. A further drop to the downside is now expected, with the risk of a complete reversal back to the monthly S1 at $0.37.

ADA price sees bulls missing the mark, and a quick sell-off possibly unfolding into the weekend as bulls will want to quickly close their longs and book gains with price action plying back relatively quickly. Certainly, with the loss of the monthly pivot, some gaps have opened for a total drop towards $0.40, with a slight chance that $0.53, the low of June, would provide a transitory floor. Should the descent continue towards $0.40 or the monthly S1 support at $0.37, new lows would be printed for 2022.

ADA/USD daily chart

There is always a slight chance, however, that Cardano price will find a bottom nearby and that bulls will support price action. If so, expect $0.60 to hold as a big figure and possibly a squeeze to lead ADA price to jump above the 55-day SMA and the $0.69 pivotal level to test $0.70. Although a modest 10% gain is in the making, it would mean a very big fundamental level would fall to the bullish camp which would be vital going forward to support any rally.