Cardano (ADA) is currently facing bearish pressure as it battles to break through key resistance levels. Technical indicators suggest the potential for further downside, as ADA remains trapped in a range just below a crucial resistance point that has held the price down for the past three weeks. Despite some positive developments, including an increase in node operators migrating to v9.1.0, ADA's price remains under pressure.
ADA Price Under Pressure, Bulls Hold Out Hope
On Tuesday morning, ADA's price saw a slight rise to $0.337, coinciding with a 1.8% increase in the overall crypto market cap. This uptick may have been influenced by the highly anticipated interview between Elon Musk and Donald Trump, which generated significant interest within the crypto community.
Meanwhile, the Cardano community continues to await the upcoming Chang hard fork, with 79% of node operators now migrated to the new v9.1.0. However, technical analysis of the Cardano price chart indicates that these positive developments may not be enough to counteract the strong bearish pressure currently affecting the asset.
Cardano's Struggle to Break Free
According to technical analysis, ADA is in a bearish short-term trend after recently breaking down from a rising wedge pattern. This breakdown is significant, as the measured move from the wedge’s height suggests a potential further decline of approximately $0.048, targeting a price around $0.280.
Currently, ADA is trading below both the 50-day Exponential Moving Average (EMA) at $0.345 and the 200-day EMA at $0.378, reinforcing the bearish outlook. Additionally, the 50-day EMA is positioned below the 200-day EMA, a common bearish signal.
Cardano faces resistance at both the 50-day and 200-day EMAs, with support levels identified around $0.28 and near $0.25, where previous consolidation occurred. The Relative Strength Index (RSI) is at 40.42, close to oversold territory, indicating that while bearish momentum is strong, the asset may be approaching a level where buyers could step in.
The Chaikin Money Flow (CMF) is at -0.14, showing that more capital is flowing out of ADA than into it, which aligns with the current bearish sentiment. If ADA manages to rise and hold above the current range, it could signal an increase in market strength, potentially invalidating the bearish outlook and pushing the price towards $0.376 and higher to $0.42.
Bulls Remain Optimistic About ADA's Prospects
Despite the bearish indicators, Cardano bulls remain hopeful that the price will rise. Data from Coinalyze shows that 69% of investors are Long on ADA, and open interest (OI) for ADA has increased by 1.67% in the last 24 hours, indicating that more money is flowing into the asset. The Long/Short ratio for ADA has also increased, suggesting that investors are opening Long positions in anticipation of a price rise.
Additionally, Cardano's active address count registered a 20% increase in the last 24 hours, reflecting growing investor interest. ADA's price is currently influenced by broader market movements, and if the market turns bullish, ADA could break above the key resistance level and reach new monthly highs in August.
In summary, while Cardano faces significant challenges in overcoming current resistance levels, the optimism among bulls and increasing market interest suggest that a reversal is possible if market conditions improve. Investors will be watching closely to see if ADA can turn the tables and resume an upward trajectory.
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