Cardano (ADA) has been on a downward trend over the past seven days, with the price dipping below the $0.41 mark. This decline is part of a broader trend seen in many altcoins, which have reacted negatively to Ethereum’s recent drop. This correction comes after a bullish run earlier in the month, where ADA holders saw significant gains. As a result, key support and resistance levels have been established for ADA, which will be important for investors to keep an eye on in the coming days.
Despite the recent decline, Cardano is currently trading at $0.3963, down by 11.6% from its peak of $0.4485 in the past 48 hours. Looking at the monthly chart, it is evident that ADA is undergoing a correction phase after a strong bullish run. The cryptocurrency surged from $0.3213 to $0.4545 within a week, marking a 41.5% increase. However, the $0.45 level proved to be a significant resistance point, leading to a consolidation phase between $0.45 and $0.40, followed by a breakdown below the support level.
Some analysts suggest that the recent consolidation pattern resembles a bullish flag, indicating a possible breakout above $0.45 and a potential push to $0.6 for ADA. On the flip side, a break to the downside could see ADA dropping to a key support level at $0.32, erasing all the gains made earlier in the month. However, the current price of around $0.40 makes this scenario less likely in the short term.
According to blockchain analytics firm Santiment, Cardano (ADA) is among the three cryptocurrencies with significantly negative funding rates on major exchanges. While this might seem concerning, the negative funding rates could actually be a positive sign. The high number of short positions could lead to a price boost if these positions are liquidated by a minor price increase. This could potentially trigger a substantial surge in ADA’s value, pushing it above $0.6. One potential catalyst for a price increase could be the upcoming Chang Hard Fork upgrade to the Cardano blockchain, which has been highly anticipated by the market.
Cardano (ADA) is currently facing a correction phase after a bullish run, with key support and resistance levels to watch. While the market sentiment has shifted, there are bullish indicators that suggest ADA could bounce back and continue its upward trajectory. Investors should stay informed about the latest developments and potential catalysts that could impact ADA’s price in the coming days.
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