Cardano Tests Critical Support as Institutional Interest Grows Despite 15% Weekly Slide
Бриф
- Cardano (ADA) снизилась на 15%, тестируя поддержку 20-недельной скользящей средней.
- Технические индикаторы указывают на перепроданность и возможный разворот тренда.
- Ключевые уровни сопротивления расположены на EMA ($0.387–$0.50), поддержка на $0.347 двойном дне.
Market Structure Shifts Lower
ADA has declined by around 15% this week which is quite a steep loss for what is considered a still very solid performing asset. Effort has clearly been made to push Cardano back down, but it could be argued that another finger in the dyke will only hold back the flowing canyon of interest for a period of time. The coin is still relatively high compared to most of the last 3 years and that includes the majority of the bull market in 2019 where ADA was still nearly 100% more in value.
The price of Cardano is down 15% from last week’s close and has used the 20-week moving average as a coordinated support level, making this critical area even more important to the current direction. The ETFs have provided a new opportunity for larger players to enter the space without the added scrutiny that comes with buying the underlying asset and the recent outflows shown by traders to a block that was ready to test technical support highlights the liquidity trap that forceful players may see as an opportunity. The false read on technicals is a major support for the sponsors of these types of liquidity traps.
| Metric | Value |
|---|---|
| Asset | CARDANO (ADA) |
| Current Price | $0.36 |
| Weekly Performance | -15.02% |
| Monthly Performance | -23.47% |
| RSI (Relative Strength Index) | 34.5 |
| ADX (Average Directional Index) | 34.5 |
| MACD (MACD Level) | -0.03 |
| CCI (Commodity Channel Index, 20-period) | -162.47 |
Momentum Exhaustion Signals Capitulation Phase Complete
With regular bullish divergence forms when an asset sets lower lows while the oscillator doesn’t. This suggests the declines are becoming progressively weaker, rendering the asset ripe for a trend reversal. Bullish divergence tends to precede a rally and, just in case, traders should keep a close eye on potential resistance tests at $2.20 and $2.40, while a move above the latter may end ADA’s 153-day downtrend.
What is interesting is how RSI reacted during past trips to the mid-30s – it did in August, oversold readings like this proceeded a 40% rally over the next three weeks. So, for swing traders, this extreme pessimism presents a chance, especially when institutional ETF flows likely support a floor that wasn’t there for the initial oversold reflexive bounces. The momentum washout from 50 to 34.51 equates to give or take 1.5 standard deviations of selling pressure forced into just seven days.
ADX at 34.54 Confirms Sellers Control the Trend
The significant resistance area above current levels, afforded by the late January “scouping low” at 34.66 and the breakout area at 35, should be approached very cautiously by both bulls and bears. Bulls because entry can be timed into better price support areas in the low 30s, while bears must be aware that a push through the 35 level would open the gap up to the March high.
In essence, the ADX setup tells day traders that the downtrend is one where you need to be nimble and play with a protective stop. Would-be contrarians are advised to stay on the sidelines and wait for lower prices and higher readings on key moving averages to signal a possible short-covering rally. The strength of trend coupled with extreme oversold momentum could very well lead to some explosive bear market rebounds; however, the odds continue to favor lower prices and new lows unless the weekly ADX deteriorates significantly.
50-Day EMA at $0.473 Becomes Distant Resistance After Support Failure
The moving average structure saw a significant collapse this week, as price cut through each prominent EMA consecutively. ADA is now trading under the complete EMA ribbon, which means it’s under the 10-day ($0.387), 20-day ($0.407), 30-day ($0.428) EMAs, and most importantly under the 50-day EMA ($0.473), which had been a strong support base throughout November. This complete breakdown on moving average support indicates a noteworthy change in the market structure.
The 50-day EMA is the light red line in the following Nio stock price chart, while the 100-day EMA is the blue line and the 200-day EMA is the dark red line:
Source: TradingView
Double-Bottom at $0.347 Anchors Final Bull Defense
There is a dense resistance layer stacked between the 20-day EMA at $0.407 and the crucial psychological $0.50 level that analysts earmark as the double-bottom pattern target. The resistance region at $0.387 to $0.407 is home to the 10-day and 20-day EMAs, as well as the breakdown levels of the recent decline. Furthermore, the monthly pivot at $0.473 mingles with the 50-day EMA to cement a strong hurdle above the current price.
Bulls defend their last stand at the $0.347 support level that was the monthly low and a potential double bottom. This level became more important after holding six times since June. It is a red line that simply cannot break if bulls have any hope of putting a bottom in and creating a sustainable recovery. The psychological $0.35 level just below generates even more significance for this zone as a nice round number that institutional bulls often target.
The current market structure is like a tug of war between the technicals and fundamentals. On the technical side, the bears are in control with strong resistance levels between $0.387 to $0.50. On the fundamental side, we have seen institutional adoption of ETFs and chain enhancements via VECTOR which could potentially act as a positive force for a rebound, supposing the technical support stands. The tight range between $0.347 and $0.387 acts as a spring with tension, waiting to pop up or down.
Bulls Require Volume Reclaim Above $0.407 to Shift Momentum
If the price reclaims the 20-day EMA at $0.407 on increasing volume, the double-bottom pattern will come into play, and the setup has a target objective of $0.50. This may play out if institutional flows through ETFs increase and on-chain metrics improve with increased VECTOR usage. Bears will try to stall the recovery at the 20-day EMA and then at $0.407. If the price turns down from this resistance, the range-bound action is likely to continue. Support on the downside is at $0.35.
If the $0.347 support fails on high volume, it would indicate that a bearish scenario is unfolding. In this case, XRP may face a significant drop with the nearest target being the $0.30 psychological support level. If XRP breaks below this level, it would lead to further panic selling, and the price could quickly decline to the $0.28-$0.30 range. The selloff is likely to stop only when XRP becomes heavily oversold, or at the key psychological level of $0.30.
Considering how oversold XRP has become, there is a decent possibility that it will initiate a bounce before heading lower. The closest support area is found at $0.351. If XRP breaks down below it, the next support area will be at $0.293. The resistance levels are at $0.443 and $0.55.
