As Cardano continues its spiral decline, data shows that the asset needs to maintain its critical demand area to avoid further price declines.
Cardano (ADA) continues to trend below the psychological price level of $1. The ninth largest cryptocurrency by market capitalization fell below its valuation in mid-December, further declining to a monthly low of $0.7620.
Meanwhile, the bears continue to dominate the cryptocurrency market, with Cardano falling for the third consecutive week last week. The adjustment process has shown key support levels for Cardano.
Critical Levels for Cardano
Insights from IntoTheBlock's analysis indicate that a strong demand wall may prevent further declines for Cardano. The data shows that 223,070 wallets bought 1.97 billion ADA at prices between $0.8366 and $0.6683, providing the first major support for Cardano if bearish pressure persists. Bulls can use this area to hedge against the risk of further declines to $0.65.
Additionally, another support wall exists between $0.5353 and $0.6683, where 405,660 addresses bought 5.39 billion ADA at an average price of $0.5973. If the initial wall breaks, the second demand wall can offer additional support.
Cardano Demand Block
Furthermore, market data indicates that Cardano has another support level between $0.68 and $0.77. According to trend analysis, the demand zone has been tested multiple times against Cardano's historical price movements.
Cardano Support | Ali Martinez
The price trend confirms the importance of the level
Meanwhile, the price action of Cardano between the demand zones of $0.5973 and $0.7556 further confirms the importance of this level for price rebounds. In context, the upper limit of demand buffered ADA's further decline on December 20, when the asset fell to an intraday low of $0.7620.
However, the detection of the area for Cardano's next price movement can be traced back to 2022. The demand zone provided support for ADA during the price adjustment in 2022, offering a brief rebound before the downtrend continued.
Additionally, when Mark turned this area into a resistance level, it hindered Cardano's upward momentum in December and March of 2023, with each rejection triggering significant corrections. Finally, ADA broke through this area during a bullish surge in November, making it an important support area.
If Cardano loses the support level between $0.5973 and $0.7556, it could retrace by 46%, reaching the next support level around $0.4600, which was the support during the price adjustment in January. Notably, 432,150 addresses bought 3.5 billion ADA at an average price of $0.4852.
Meanwhile, ADA is trading at $0.848, down 3.3% over the past 24 hours.