Technical Analysis and Market Entry: Cardano’s ADA is Testing Critical Support Zone
- ADA selling resumes, as bulls fail to stage a rebound from late June bear attack.
- ADA/USDT is testing a critical area of demand to the downside, which if broken, could invite further pressure from the sellers.
ADA/USDT: Recent Price Behavior
Cardano’s ADA is back within the firm control of the market bears, after attempting to stage a rebound. The price had been harshly driven lower by sellers, a trend that was triggered late in June. ADA/USDT was moving within a consecutive and robust trend to the north. It had rallied some 76% from the start of May down at $0.06000, up to $0.10630 printed on 26th June.
Following the noted high print late in June, ADA/USDT has tumbled some 53%. At the time, the price had run up to its highest level since September 2018. However, this was also a known substantial supply area. The amount ADA had dropped after being in this territory should be noted. ADA/USDT fell over 45%, a very identical drop to the one most recently observed.
100% Reversal of 2019 Bull Run
Given the current downside momentum, ADA is subject to losing the gains from the 2019 price recovery. At the start of the year, the price was trading down at a low of $0.04000. It was down at this territory where buying momentum picked up much pace. The bears are retesting a critical area of demand ahead of falling back down to the 2019 low.
The noted zone runs from $0.06100 down to $0.05100 range, ADA/USDT had attempted to stage a rebound here from 17th-20th July. It bounced some 25%, before proving to be very much a short-lived recovery. Any pullbacks in the price are being sold by the bears, as ADA like much of the market continues to trend south.
Should the bears force a daily closure below the noted demand zone, then expect a strong potential wave of selling pressure. To the downside, a target zone of interest would be $0.04000. ADA/USD last traded down here in March, when upside momentum began to pick up some pace. A breakout below and retest would require confirmation entry for shorts. Stops would be placed above the zone at $0.06500.
If the noted demand zone does not see a daily breach by the bears, then there is still a good chance of some upside. Targets would be $0.08000 and then $0.10000. Stops would be placed below the support area at $0.04800.
To conclude, it is all very much dependant on the $0.06100-$0.05100 price region. ADA/USDT could very well be defined in its trend from this territory, given how significant the zone is.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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