Cardano (ADA) price could not capitalize the gains this week and declined, wiping out most of the gains of the previous week. The asset’s price recorded a significant bounce back in the previous week adding 18% to the market cap.
However, as ADA price week dropped this week, it may disappoint investors pegging their hope on last week’s price rise. What does the coming month hold in store for ADA?
Here is a detailed analysis to offer a clearer picture as to the possibility of a bullish reversal or bearish continuation for Cardano.
ADA Price DAA Divergence Highlights A Bearish Control
The price performance of Cardano hints at a weekly loss of nearly 13%, a loss of nearly 41% on a year-to-date basis. At the time of writing, Cardano was exchanging hands close to $0.348, recording a mild 0.55% gain in intraday.
As per on-chain analytics data, a bearish divergence was observed between the Price and DAA (Daily active address). As of writing, a bearish divergence was observed indicating a potential decline in the asset’s price.
Cardano Price Technical Analysis
The daily chart highlights formation of declining parallel channel with ADA respecting the lower and upper boundaries as support and resistance. The volume to market cap ratio at 2.14% suggests low volatility in the crypto.
The price drop in the recent sessions have dragged the price below the key exponential moving averages of 20 and 50 days. This indicates a weak outlook in the short term. Now, until the price is maintained in the channel, it may continue to remain in a correction phase and fall more.
Recently, ADA price suffered rejection from the upper boundary of the channel and was headed towards the lower boundary. Moreover, the price needs to break out of the channel in order to turn bullish in the long term.
At the time of writing, RSI line was at 45.2 points and 14 day SMA line was at 50.3 points. Moreover, a bearish crossover was observed indicating the losses may widen more in the short term.
Cardano (ADA) failed to sustain last week’s gains, dropping nearly 13% this week. Despite a brief 0.55% intraday gain, investor concerns have risen after a decline this week. Moreover, the on-chain data shows a bearish divergence between price and daily active addresses, suggesting further declines.
Furthermore, the daily chart indicates a declining parallel channel. Cardano price is below key 20 and 50-day exponential moving averages, pointing to short-term weakness. The RSI at 45.2 and a bearish crossover with the 14-day SMA at 50.3 suggest potential for more losses in the short term.
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