The Cardano price found strong support at the 200-Day Moving Average, leading to breakout calls. However, in my opinion, ADA goes lower. Cardano (ADA) is trading at $2.016 (2.25%) today but holding a 7-day gain of 3.40%. Due to Solana’s recent performance, ADA ranks the 6th-largest cryptocurrency (3rd in August) ahead of Ripple (XRP).
Cardano has struggled to regain upside momentum following the Alonzo hard fork in September, trending lower for the last two months. Subsequently, the ADA price has fallen off the pace recently and lost considerable ground to other prominent layer-1 projects.
As a result, the ADA token retreated to the 200-Day Moving Average last week. Fortunately for the bulls, the Cardano price is holding above the indicator. Furthermore, the token is testing the resolve of descending trend line resistance. However, the trendline aggressively rejected yesterday’s breakout attempt, which could signal a round trip back to the 200-DMA.
The daily chart shows ADA failed to clear trend resistance at $2.120 on a closing basis in yesterday’s session. The 50 and 100-DMA’s at $2.159 and $2.185 combined with the trend create robust confluent resistance. The weak Relative Strength Index (45) and MACD reinforce the negative momentum.
Taking these factors into account, the Cardano price should head back to the 200-DMA at $1.817. Furthermore, if ADA drops below this level on a closing basis, an extension towards $1.500 is probable.
The bearish view relies on the price remaining below the trend and the 50 and 100-DMAs. On that basis, a close above $2.195 invalidates the thesis.
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This post was last modified on Nov 04, 2021, 08:34 GMT 08:34