Cardano price breaks below key support, will the decline continue?

Cardano’s native token, ADA, has been hit hard by the recent downturn in the cryptocurrency market, experiencing a significant drop in price. Despite a recent increase of over 6% over the past 24 hours, bearish sentiment continues to take hold.

During the last week, Cardano has lost about 26% in value, resulting in breaking important support levels that have now turned into resistance levels.

From a technical perspective, Cardano indicates a prevailing bearish trend, with both demand and accumulation levels remaining relatively low. It becomes important for the coin to overcome overhead resistance in order to reduce the growing force of bearish forces and facilitate a potential recovery.

Currently, the coin is oversold, prompting the emergence of buyers with the aim of crossing the resistance barrier. Furthermore, the drop in bitcoin’s value in recent days, as it revisited the $26,000 level, has had a negative impact on various altcoins, including Cardano. As a result, the market capitalization of Cardano has fallen, indicating less buying power in the market.

Cardano Price Analysis: One Day Chart

At the time of writing, ADA was trading at $0.28. After its rejection at the $0.34 level, the bears have taken control of the price trajectory. Currently, ADA has revisited a multi-month low price level. This signals a bearish trend and an important resistance level for the altcoin is seen at $0.30.

If ADA faces rejection at this level, the price is likely to decline further from its current levels. In the event of further depreciation, the coin may initially find support at $0.25 and potentially move even lower.

The trading volume was relatively low for Cardano in the previous session, suggesting that sellers currently hold an advantage in the market.

technical analysis

After rejection at $0.34, Cardano (ADA) has struggled to gain positive momentum and attract demand. The Relative Strength Index (RSI) has fallen below the halfway line and also below the 30-mark, indicating that the coin is overbought and oversold.

Furthermore, ADA price has declined below the 20-simple moving average (SMA) line to suggest that selling pressure is currently driving the price momentum.

To revive the demand in the market, ADA needs to overcome the resistance level of $0.30. Breaking this key hurdle could potentially ignite a recovery and attract buyers back into the market.

Due to the low demand for ADA, sell signals have emerged, suggesting a possible continuation of the downtrend. The Moving Average Convergence Divergence (MACD), which indicates price momentum and potential reversal, has formed red signal bars aligning with sell signals for ADA.

Additionally, the Bollinger Bands, which represent price volatility and volatility, have diverged significantly. This indicates that the volatility and volatility in the price may increase in the upcoming trading sessions.

Featured images from Unsplash, charts from TradingView.com