cardanos [ADA] The price has had a strong bearish impact, especially since the vital resistance fell from USD 1.2. After dropping below the 20 EMA (red) and 50 EMA (cyan), the altcoin found itself in a series of liquidations as it correlated with the broader sell-off.
Changing the general outlook was another opportunity for the bulls as they had to find renewed buying pressure to break the constraints of the 23.6% Fibonacci resistance. At the time of writing, ADA was trading at $0.5307, down 3.12% in the past 24 hours.
ADA daily chart
Aggressive sell-off of the $1.2 ceiling resulted in a 67.35% drop from the ADA’s April highs. As a result, after falling below its Point of Control (POC, red), ADA spiked its 15-month low on May 12. Heading south, the 61.8% Fibonacci level held up well after containing the falling wedge breakout. While hampering the bear run, buyers eventually put in a few green candles but failed to sustain it on increased volumes.
Over the past six days, the altcoin has seen an expected breakout of a bearish pennant as price action neared the 23.6% barrier. With an overloaded gap between the 20 EMA and 50 EMA, the sellers showed their superior lead in the current scenario.
An ongoing rebound in immediate support could spell an expected hurdle in the USD 0.59 zone near the 23.6% level. However, without sufficient volumes, buyers would find it difficult to challenge the resistance offered by the short-term EMAs of the alt. Buyers are now looking to narrow the gap between the 20/50 EMA in the coming days.
The Relative Strength Index suggested that sellers have a clear advantage in the current market structure. The buyers had to push the RSI above the 38 level to propel a short-term rally above the 23.6% level on the charts.
An inability to pick up Aroon (yellow) from zero can lead to further unwanted losses. Any recovery from this level would open doors for a smoother recovery.
Looking at the current bounce back from the $0.5 level, ADA could hit the 23.6% level to test its resistance. Any breach above this level could open the way to challenge the limitations of its EMAs in the near term. But the threats along the Aroon up indicator may delay the potential of a bull run.
Finally, ADA shares a high correlation with the king coin. Therefore, traders/investors must keep a close eye on Bitcoin’s movement in order to make a profitable move.
This post Is Cardano’s [ADA] rally probably yet? The answer may impress you
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