Cardano has been on a steady downtrend since late 2023, forming a clear descending triangle on its daily chart with consecutive lower highs and lower lows. The cryptocurrency recently experienced a significant drop, breaking below key support levels and currently trading around the $0.5519 mark.
The price action shows that ADA/USD has been consistently respecting the upper boundary of the descending triangle, with each rally being met with selling pressure. The most recent rejection from the upper trendline in March triggered a sharp decline, suggesting bears remain firmly in control of the market direction.
Key Cardano Levels to Watch
Potential support levels for ADA/USD remain at the current price of $0.5519, which aligns with the lower boundary of the descending triangle. A break below this level could trigger an accelerated sell-off toward the $0.4000 psychological level.
On the upside, immediate resistance lies at the 100 MA (currently around $0.7800), followed by the upper boundary of the descending triangle near the $0.8000 mark.
Traders should watch for any potential reversal candle patterns at the current support zone, as these could signal a temporary relief rally. However, such a rally would likely be limited by the 100 MA and the downward trendline resistance, potentially offering new shorting opportunities for bearish traders.
ADAUSD Technical Analysis
Looking at the moving averages, both the 100 MA (blue line) and 200 MA (red line) are sloping downward and positioned above the current price, confirming the bearish bias. The price is trading well below these dynamic resistance levels, with the 100 MA crossing below the 200 MA earlier this year – a bearish crossover that signals continued downside momentum.
The recent price action has pushed ADA to test the lower boundary of the descending triangle, which could potentially act as support. However, the lack of bullish reversal patterns suggests that further downside may be in store if this support fails to hold.
From a technical indicator perspective, the stochastic oscillator (14,3,3) shows readings in the lower half of its range with a bearish divergence visible in recent weeks. The downward slope in the stochastic suggests that bearish momentum is accelerating. This indicator has remained predominantly in the oversold territory, occasionally attempting to recover but failing to sustain any meaningful upside momentum.
The MACD (12,26,close) indicator reinforces the bearish outlook, with the MACD line trading below the signal line and the histogram showing negative values. The lack of bullish crossovers in the MACD indicates that buyers have been unable to gain traction in the market.
Cardano Price Outlook
For a longer-term perspective, ADA/USD would need to break above both moving averages and the upper trendline resistance (around $0.8000) to indicate a potential trend reversal. Until then, the path of least resistance remains to the downside, with sellers likely to capitalize on any price bounces.
From a fundamental standpoint, Cardano, like many altcoins, has been struggling in comparison to Bitcoin’s relative strength. The broader cryptocurrency market sentiment and developments in the Cardano ecosystem will play crucial roles in determining whether ADA can stage a recovery or continue its bearish trajectory in the coming weeks.
Traders should exercise caution and implement proper risk management strategies when trading ADA/USD in the current volatile market conditions, particularly as the cryptocurrency approaches critical support levels.