The cryptocurrency market has recently seen a downturn, with Cardano (ADA) seeing a notable drop, falling below $0.4233. This drop can be attributed to the recent shift in market sentiment towards a bearish outlook. The critical question now is whether this bearish momentum will continue or whether a potential rebound is on the horizon.
This article looks at the current market position and technical indicators to offer a comprehensive analysis of the impact of ADA’s price drop below $0.4233. It also assesses whether this negative momentum will continue or whether a potential reversal is on the horizon.
Cardano has fallen 5.45% in the last day, trading at around $0.396 at the time of writing. The cryptocurrency has over $14 billion in market cap and $376 million in trading volume. Over the last day, ADA has seen a 5.35% decline in market cap and a 7.32% increase in trading volume.
Current Market Review: ADA’s Recent Drop
On the 4-hour chart, ADA price is currently bearish and trading below the 100-day simple moving average (SMA) after successfully breaking below $0.4233. It is also important to note that after this breakout, Cardano is moving along a bearish trajectory towards the support level of $0.3389.
In addition, the 4-hour Relative Strength Index (RSI) signal line has dropped below 50%. This decline suggests that ADA may extend its current bearish trend towards the $0.3389 support level.
On the 1-day chart, it is evident that ADA price is currently bearish and has fallen significantly below both the 100-day SMA and the $0.4233 support level. After breaking below the $0.4233 support level, Cardano has consistently maintained a bearish trajectory towards the $0.3389 support level and may continue this trend for some time.
Finally, it can be seen that the 1-day RSI signal line has also dropped below 50% and is currently moving towards the oversold zone. This position of the RSI indicator suggests potential further declines for ADA.
Possible Scenarios: Will Cardano Recover or Continue to Fall?
If Cardano can maintain its current bearish momentum to reach the $0.3389 support level and close below, the price may continue to move lower to test the $0.2388 support level. If this level is broken, the digital asset may experience further price declines towards other lower ranges.
And vice versa, if the price of ADA rebounds at the $0.3389 support level, it may start to rise again, heading towards the $0.4233 target. Additionally, once ADA breaks through this level, the crypto asset may see further gains price increasetesting the $0.5229 resistance level and possibly moving to even higher levels.
