Cardano bulls would need to watch three important levels in order not to miss crucial market moves
Cardano’s price performance in the last few months has been depressing. The asset has lost more than 25% since November and has not been able to gain enough momentum to return to the pre-FTX catastrophe levels. However, the most recent recovery might be a sign of an upcoming reversal.
In the last 16 days, Cardano has gained approximately 5% to its value from the local low and reached the first short-term resistance level in the form of the 21-day moving average, which usually acts as the first barrier for an asset moving in a prolonged downtrend.
In the case of a successful breakout, ADA will most likely start moving toward the next resistance level in the form of the 50-day moving average. In the case of a breakthrough, a trend reversal would be way more likely.
The next key threshold to watch would be the $0.3 support level, which has been the foundation for every upward move for ADA in November. Even failure during such a breakout attempt would not make a recovery for ADA in the future impossible. Thanks to the resilient support level, Cardano might enter a prolonged consolidation, but not break down even further.
Additionally, investors should watch descending volume profiles — a sign of fading trends. Decreasing volume usually reflects the inability or unwillingness of traders and investors to provide more selling pressure and push the price of an asset down.
According to profitability indicators, Cardano has been severely oversold for months. In order to keep up the pace, bears will have to find additional funding for their shorting operation, which might be a problem during the overall cryptocurrency market recovery.
Share this article: