Cardano experienced a harsh rejection at a key technical level, indicating potential challenges ahead for the digital asset. The 26-day exponential moving average (EMA), normally considered a minor support structure for consolidating assets, proved to be an insurmountable barrier for ADA price.
Cardano experienced a harsh rejection at a key technical level, indicating potential challenges ahead for the digital asset. The 26-day exponential moving average (EMA), normally considered a minor support structure for consolidating assets, proved to be an insurmountable barrier for ADA price.
This level, which often serves as a litmus test for short-term market sentiment, has underscored a bearish stance as ADA failed to secure its position above it.
The price chart illustrates ADA’s struggle to maintain bullish momentum, with a sharp rejection seen at the 26 EMA, marked by a price around $0.5478. This level of resistance has not only halted its rise but also implies deeper resistance than previously anticipated. The rejection at this threshold is particularly telling, as the 26 EMA is not typically characterized by such significant price action.
ADA’s immediate support now sits around $0.4763, a level that could serve as a base for any potential bounce. However, given the strength of the recent rejection, the asset’s price is more likely to test the stronger support level of $0.4234, which sits near the 200-day SMA, a critical long-term indicator that at It often acts as an important psychological indicator and technical support level.
Digital assets lose against USD
The US Dollar Index, which measures the strength of the dollar against a basket of six major currencies, has recently seen a significant rise, sparking concerns in the cryptocurrency market.
Unchanging interest rates and prevailing risk aversion in the markets have helped push the DXY to new highs. This rise is a bearish sign for cryptocurrencies, suggesting that the digital assets may face a difficult road ahead.
From a technical point of view, the DXY is showing strong bullish momentum. The index has broken through a critical resistance level at 103.5, which now serves as a support level, indicating a strong bullish trend. The next resistance lies at the recent peak near 104.5, which, if broken, could signal a continuation towards higher levels not seen in recent history.
Increased dollar strength typically leads to a decrease in risk appetite among investors. This shift sees funds move out of riskier assets, such as cryptocurrencies, toward what is perceived as the relative safety of the dollar.
XRP on the verge of reversal?
The XRP chart shows possible early signs of a reversal, which intrigues market participants. A closer look at the price movement and volume indicators could suggest that a change in the prevailing downtrend could be on the horizon.
Analyzing the chart, XRP has shown resistance at the $0.5387 support level. This is critical as it aligns with historical price reactions, indicating a strong psychological and technical threshold for market participants. The resistance to watch is currently at $0.5730, where XRP has faced multiple rejections in the recent past. A decisive close above this level could signal a change in market sentiment from bearish to bullish.
Furthermore, the possible reversal is being hinted at not only by price action but also by market behavior. An increase in the liquidation of short positions suggests that the bears may be losing control. Pressure on the shorts, particularly if the price starts to rise, could contribute to a quick change in price direction. This is because as short positions are closed, XRP needs to be purchased to cover them, which can drive the price up and potentially initiate a reversal.
The specific continuation scenario for XRP would involve breaking the $0.5730 resistance level and holding above it. This would likely lead to a series of short sell-offs, adding fuel to the bullish momentum. Subsequently, if this bullish scenario plays out, XRP could test the next resistance near $0.60, a level that would confirm that a stronger reversal trend exists.
