Cardano (ADA), saw a significant decline in the last few days. This resulted in a 22.6% price drop.
- ADA price seen losing another 14% in the coming days
- Cardano buyers drop support at the 20-day EMA
- ADA intraday trading volume registers a 104.6% gain
The increased selling activity causes the offshoots of crucial supporting EMAs which attempt to break below $0.45. This gives buyers the opportunity to profit from price falls.
Cardano Shows Bullish Reversal
The ADA/USD market price has a bullish reversal from $0.4 forming a rising channel structure with a 47.5% price rise. However, price rejection is present at the $$0.595 support level for the 22.6% price fall; this shreds below support trendline.
The ADA price trades at $0.4551 as of the writing of this article, indicating a bearish trend. This is a drop of 3.07% according to CoinMarketCap.
The daily chart shows that the ADA price has formed a three-colored black crow structure, which indicates some struggle to hedge support $0.45.
The intensified selling pressure can be seen especially in the surge in intraday trading volume and the rise of long-wick candles.
The daily chart shows a bearish continuation, strengthening the likelihood of ADA falling below $0.45 or undergoing a downtrend.
With that in mind, a short-selling opportunity could arise with the shackling of the key support zone with the opportunity of a 13% decline to revert to July’s low that registered at $0.4.
ADA Price Remains Bearish
If there’s a price drop that occurs in conjunction with the bullish reversal of the $0.45 support zone then it could cause a price hike that is above the 50 day EMA.
RSI for ADA shows a dramatic increase in the coin’s bearish character as it plunges below the 14-day half line or average line.
ADA faked a breakout a few days ago. This caused confusion for all market participants. It was observed that ADA price rose to $0.55 and then dipped below in a few days time registering a week’s loss of 12.9%. With these numbers, ADA falls below the mark particularly in August.
The overall outlook for Cardano is very bearish. MACD signals indicate that ADA may revert to its mid-July lows due to the continuing correction.
Source: TradingView.com| Source: TradingView.com Featured image taken from Freepik. Chart from TradingView.com