Cardano has been displaying a persistent downtrend on its daily chart, with price action forming a descending channel pattern since early March after a significant spike that reached approximately $1.00 levels.
The cryptocurrency is currently trading around the $0.6518 mark, testing a crucial support zone that may determine its next major move.
Key Cardano Levels to Watch
A long-term support zone is visible around $0.6000-$0.6500, highlighted by the blue horizontal band on the chart. This area has provided support on multiple occasions in February, making it a critical level to watch. A decisive break below this support could accelerate the downtrend toward the $0.5500 level.
On the upside, immediate resistance appears around the $0.7500 mark, followed by the significant barrier of both SMAs converging near $0.8000. The former high of approximately $1.0000 from early March represents a major resistance level that would need to be overcome for a true trend reversal.
ADAUSD Technical Analysis
The Stochastic oscillator (14, 3, 3) is showing signs of potential bullish divergence, with the indicator forming higher lows while price continues to make lower lows. This divergence could hint at weakening downside momentum and a potential reversal. However, the stochastic hasn’t yet reached oversold territory, suggesting there might still be room for further downside before a significant bounce occurs.
The MACD (12, 26, close) is hovering near the zero line with minimal momentum in either direction, indicating indecision in the market. The histogram bars have been diminishing in size, suggesting decreasing bearish momentum, though not yet signaling a definitive shift to bullish territory.
The price has been consistently trading below both the 100 Simple Moving Average (SMA) and the 200 SMA, which are positioned around the $0.8000 level.
This bearish alignment of the moving averages indicates sustained selling pressure, with the 200 SMA positioned above the 100 SMA suggesting a strengthening bearish sentiment. The gap between these indicators appears to be narrowing slightly, though not enough to signal an imminent bullish crossover.
Cardano Price Outlook
If the current support holds and the stochastic divergence plays out, ADA could stage a recovery toward the upper channel boundary. Confirmation would come from a series of higher lows and higher highs, along with a crossover of the MACD above its signal line.
However, if selling pressure intensifies and ADA breaks below the current support zone with conviction, the downtrend could accelerate. In this bearish scenario, traders should watch for the next support around $0.5500, which aligns with previous significant price action from late 2023.
Cardano’s price action should be viewed in the context of the broader cryptocurrency market, which has seen mixed performance lately. While some major cryptocurrencies have shown resilience, many altcoins including ADA have struggled to maintain upward momentum. Regulatory developments and macroeconomic factors continue to influence investor sentiment across the crypto space.
Traders should exercise caution in this environment, utilizing proper risk management techniques and considering both technical and fundamental factors before making trading decisions.
