Cardano’s pricing has given few hints about its future trajectory as it continues to consolidate.
ADA is reaching a critical support level, and a break below it could signal the end of the bearish trend.
Despite the pessimistic outlook, Cardano’s price is protected by a strong base.
Despite recovering 33 percent from its reaction low of $1.00 on June 22, Cardano’s price motion has been boring. Because ADA hasn’t provided any directional cues, investors should expect the asset to consolidate further until a break out occurs.
Since its ADA achieved a record high of $2.47 on May 16, Cardano’s price has failed to make further highs, allowing a declining trend line to form on the daily chart. Following its attempt to break out, the cryptocurrency now appears to be consolidating.
Cardano slashed through the declining trend line that has imprisoned ADA in a downward spiral, implying that it is poised to turn things around.
However, Cardano’s price is trapped between a slew of resistance levels, as the traction has been fleeting and hasn’t resulted in a sustained surge higher. ADA is rapidly retracing to the aforementioned declining resistance level, and this support level of $1.33 is being eroded.
Cardano is currently trading at $1.34, below the 38.2 percent Fibonacci retracement level, indicating weakness. ADA has not closed above the 50-day Simple Moving Average (SMA) or the 100-day SMA since June 10 and June 18, respectively, adding to the bearish thesis.
Daily ADA/USDT chart
As ADA bulls begin to lose momentum, the fall in trading volume, along with the price, gives validity to the bearish picture. Further selling pressure could bring Cardano price below the declining trend line and 6.5 percent lower to the $1.25 demand barrier, which coincides with the 27.2 percent Fibonacci retracement level.
Although ADA’s current trend appears to be sideways, if the bulls lose any more ground to the bears, Cardano’s price would find its greatest line of defense at the lower boundary of the demand zone at $1.15, before retesting $1.00.
If the bulls manage to change Cardano price action to the upside by closing over $1.34, ADA might be set for a 7.5 percent leap to the 100-day SMA at $1.44, which also happens to be the 50 percent Fibonacci extension mark.
Speculators should be aware that this level might operate as significant resistance, with only a daily close above it opening up the possibility of a 17 percent rally to the 50-day SMA and the 61.8 percent Fibonacci extension level at $1.55./n
