Key Takeaways:
- Cardano prices fell nearly 28% since May 5, following the wider crypto market's downtrend.
- However, traders remain optimistic of ADA's prospects.
NEW DELHI (CoinChapter.com) — Blockchain platform Cardano’s native token ADA prices fell to levels last seen in Feb 2021, as the crypto market fell after the U.S. Federal Reserve announced a 0.5% hike in interest rates.
Bitcoin (BTC) prices reached Jul 2021 levels as the overall crypto market cap fell by 5.35% in 24 hours on May 9 as it fell to $1.49 trillion. ADA fell by nearly 28% between May 5’s high ($0.905) and May 9’s intraday low ($0.65).
The ADA token prices are trading inside a descending parallel channel, falling more than 15% on May 9, going from a high of $0.769 to reaching an intraday low of $0.651. Moreover, the long upper wick on the day’s candle shows bears have complete control over ADA’s price action.
ADA prices fell below their 20-day moving average (red wave, 20-day MA) on May 5, as prices dropped more than 12% intraday. Cardano prices might test support near $0.622 if the ADA token continues its downtrend.
Also Read: Could Cardano be the biggest failure in blockchain?
Further downtrend would likely see ADA prices breach below immediate support to fall near support at $0.564. Finally, ADA prices might bottom out at support near the channel’s support line at $0.5.
Meanwhile, momentum oscillator MACD continues to be bearish for the ADA token. Negative bars on the MACD histogram are expanding, indicating the MACD line (difference between 12-day and 26-day EMA) is moving away from the MACD signal line (9-day EMA of MACD).
Expanding negative bars indicate a strengthening bearishness of Cardano’s price momentum.
Cardano’s RSI Near Oversold Levels
Cardano’s relative strength index is near oversold levels, clocking at 29.73 on the daily charts. The RSI measures the magnitude of recent price changes to analyze overbought or oversold conditions. When the RSI goes below 30, the asset enters the oversold region.
An oversold RSI indicates a bullish trend reversal is on the cards. With ADA prices at oversold levels, investors who rely on RSI would likely move in to buy the dip and trigger a rally. Moreover, the ADA token also broke below the lower trendline of the Bollinger Bands indicator.
In detail, Bollinger bands consist of a simple moving average (middle band) and an upper and lower band. The two bands are usually two standard deviations from the middle band. Therefore, when an asset’s prices break below the lower bands, it denotes an oversold condition.
In case ADA reverses its downtrend, Cardano prices would need to flip immediate resistance near $0.741. After flipping and consolidating above immediate resistance, ADA would likely target resistance from its 20-day MA (red wave) near $0.84.
Also Read: Cardano (ADA) holds a rebound level amid Ledger 4.0 upgrade.
Finally, a sustained uptrend would see ADA challenge the resistance confluence from its 50-day MA (yellow wave) and 100-day MA (purple wave) near $0.94.
Despite the downtrend, traders remain optimistic about ADA’s future.
Dan Gambardello, the founder of Crypto Capital Venture, shared his bullish view on ADA prices, stating that he believes the token would reach a $1 trillion market cap in the future.
However, despite Cardano having nearly 900 projects on its platform, the expanding ecosystem has failed to save ADA from going rekt.
At the time of writing, ADA was trading at $0.646, down 12.7% on the day.
