- Cardano price rose 47% on May 20 but faced rejection at 50 four-hour SMA at $1.96.
- ADA could continue to free fall until it tests the 200 four-hour SMA at $1.52.
- A decisive close above $1.96 will invalidate the bearish thesis.
Cardano price shows a second bearish attempt to break an uptrend as it dipped into a critical demand area. If the sell orders keep piling up, ADA is likely to retest the confluence of two crucial support levels.
Cardano price surged 92% from its bottom on Wednesday at $1.01. However, this massive rally faced extinction as it encountered the 50 four-hour Simple Moving Average (SMA) at $1.96. Here, the bears took over ADA and pushed it down by 10.84% to where it stands at the time of writing, $1.74.
Due to the presence of the 100 four-hour SMA at $1.79, Cardano price will likely face rejection. In such a case, the so-called “Ethereum Killer” might slide 15% to tag the 200 four-hour SMA at $1.52, coinciding with the base of a demand zone that stretches from $1.76 to $1.52.
This level is a chance for the buyers to rescue ADA. However, a failure to do so will result in a retest of the support barrier at $1.47.
Although unlikely, if Cardano price slices through $1.47, it will result in a 10% sell-off to the swing low created on May 20.
ADA/USDT 4-hour chart
If the buyers manage to slice through the 50-SMA at $1.96, it would invalidate the bearish thesis and trigger more sidelined investors to jump on the bandwagon. Under these circumstances, investors can expect ADA to rally 9% to the immediate resistance level at $2.15.
Breaching this level will allow Cardano price to rise another 7% to $2.30.
