Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
The Swiss cryptocurrency ADA witnessed an almost 100% increase in seven days in early February 2021. However, after August, investor interest seems to have waned a bit. Strangely enough, after February 2022, the currency will side with the bulls. In fact, according to some on-chain stats, there are compelling arguments that Cardano could be a good asset to buy for a bull run as a longer-term investment.
However, it is important to note that the short-term outlook for Cardano has been bearish. After failing to cross $1 in recent days, the ADA dipped back below $0.9. In addition, it could see a further downside as the price sought demand. Interestingly, in the past 24 hours, open interest in Cardano in the markets has declined, in addition to the price itself. This suggested that the near-term bearishness could be a pullback rather than a strong downward move.
ADA-1H
Source: ADA/USDT on TradingView
As the charts show, the price broke $0.925 and $0.95 in late February and bulls were encouraged as ADA flipped $0.95 from resistance to support. However, just as Bitcoin itself had some resistance near $45,200, so did ADA at $1.
Sellers were quite strong above $0.98 and the price was firmly rejected and then pushed back below $0.95 and $0.925.
In the 24 hours leading up to press time, ADA lost 7.4% and $0.925 reverted to resistance. In the south, the $0.817-$0.84 (cyan box) area can be revisited in search of demand.
rode
Source: ADA/USDT on TradingView
The RSI has been trending down the charts at $1 since the rejection and stood at 30.98 at the time of writing, which was on the brink of being oversold. This in itself does not mean that the price will rise any time soon. In addition to the RSI, the Awesome Oscillator also showed that bearish momentum has strengthened in recent days.
The OBV also steadily dropped down the charts.
Conclusion
The price action and indicators painted a bearish picture for Cardano. Another drop of nearly 5% would see ADA within the $0.84 region on the charts. While the $0.84 area could prove to be a buying opportunity, risk-averse buyers should sniff it. The short term market structure has turned bearish again and buying at $0.84 would be a contrarian trade and not a trend following trade.
This post A relapse or a rally? This is where Cardano can go next
was published first on https://ambcrypto.com/a-pullback-or-a-rally-this-is-where-cardano-can-go-next/
