There is a price level where a positive turnaround might happen soon for Cardano (ADA), which has fallen 46% from its annual high. Let me tell you what's important:
The negative trend that has been characterized since March has been traced by the daily ADA/USD chart, which is now following a falling channel. At its highest point on Monday, the ADA price was close to $0.475, but it ran into strong opposition from both the upper limit of the channel and the crucial 20-day Exponential Moving Average (EMA), which is presently at $0.47.
Since it lines up with previous price rejection points, this resistance level will play a pivotal role in the near future. Around $0.44 is the current price of ADA at the time of this writing.
A thick zone of resistance is shown by the convergence of the 20-day, 50-day, and 100-day exponential moving averages ($0.47, $0.54, and $0.51, respectively) above the present price level. This resistance level is further reinforced by the 200-day exponential moving average (EMA) at$0.52, which indicates active bearish momentum.
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On the daily chart, the Relative Strength Index (RSI) is now at 38. This number does not go into oversold territory (below 30), but it does suggest that there is negative momentum and that the price might continue to decrease until there is a reversal.
To signal a change in market sentiment and confirm the breakout from the falling channel, ADA must break above the $0.47 barrier (20-day EMA) on heavy volume. Only then will we see a bullish turnaround. After that, the major resistance zone is the cluster of exponential moving averages.
If we want to establish bullish momentum and break above the annual high of $0.81 from March, we must cross this zone. In that case, a decline below $0.40 might be in store for the ADA price as it approaches the channel's midline.
Comprehensive Overview of Weekly Charts
Moving on to the weekly chart, a more comprehensive view likewise highlights the pessimistic outlook that has pervaded ADA since its all-time high of $3.17 in late 2021. This pattern of falling prices is a classic example of a downtrend.
In recent weeks, there has been sustained selling pressure, as the price movement has remained suppressed below the long-term moving averages. These averages slope downwards and include the 20-week EMA at $0.52, the 50-week EMA at $0.48, the 100-week EMA at $0.51, and the 200-week EMA at $0.52.
Additional information may be gleaned from the Fibonacci retracement levels, which are derived from the high of $3.17 to the low of $0.22. The current price of ADA is close to $0.44, which is higher than the $0.40 level that serves as both technical and psychological support.
The 0.236 level at $0.918 is the nearest important Fibonacci retracement level, and ADA has had difficulty breaking through it. For a substantial change in momentum and purchasing interest to be evident, a break above this level would pave the way to higher Fibonacci levels at $1.348 (0.382) and $1.697 (0.5).
Attention should be directed towards the daily resistance at about $0.47 (descending channel breakout) if ADA is to move away from its bearish restrictions. If we want to confirm a bullish reversal, we need to break through this resistance. We expect the negative trend to continue until this level is crushed on a large scale.