Cardano Price Analysis: ADA Bulls Defend $1.20, But $1.00 Calls

Summary:

The Cardano price has found a floor at $1.20, but a distinct lack of bounce suggests the bears will soon have their way with ADA.

The Cardano price has found a floor at $1.20, but a distinct lack of bounce suggests the bears will soon have their way with ADA.

Cardano (ADA) is starting a new week in familiar territory, close to a five-month low at $1.24 (-0.5%). The ADA token continues to underperform other top-ranked cryptocurrencies. The current price is 60% below September’s all-time high and just 20% above the July lows. Furthermore, Cardano’s market cap has fallen by $50 billion over the last three months. As a result, Binance Coin, Tether, and Solana have flipped Cardano, which now ranks as the 6th most valuable cryptocurrency.

Cardano was trending lower even before the combined Cryptocurrency market surpassed $3 Trillion in November. Ahead of the Alonzo hard fork to smart contract functionality, ADA was one of the best-performing blue-chip assets. However, the highly-anticipated upgrade failed to deliver additional gains. Furthermore, the general feeling amongst crypto investors is rival Blockchains like Solana and Avalanche are superior alternatives to Cardano. Subsequently, the Cardano price lacks a bullish catalyst and struggles to sustain a bounce. However, the price is currently stable above $1.20, although downside pressure persists.

ADA price Forecast

The daily chart shows the Cardano price is in a long-term downtrend beneath the major moving averages. However, ADA has held above $1.20 for the last two weeks. Notably, the Relative Strength Index is increasing despite the lethargic price action. Analysts consider this divergence as bullish, potentially signalling a near-term bottom.

Despite the bullish divergence, I expect ADA will soon break down below $1.20, targeting trend support at $1.00, horizontal support at $1.90, and potentially lower still. The bearish pressure will recede of ADA climbs above the December 7th high. Therefore a close above $1.481 invalidates the bearish view.