October 31, 2023
The Cardano price has experienced a significant recovery in the last two weeks, driven by a 'Double Bottom' pattern and an overall uptrend in the broader crypto market. The price of ADA has surged by 23.38% from a monthly low of $0.24 to its current trading price of $0.296. However, there are potential challenges that buyers need to consider amidst the current market volatility.
Buyers are facing the question of whether they can sustain the upward momentum of ADA. A breakout above the $0.3 resistance level could intensify buying pressure. Additionally, a potential bullish crossover between the 20-day and 100-day Exponential Moving Averages (EMA) could further support the continuation of the current recovery. However, it is important to note that the intraday trading volume in ADA is currently at $127 million, indicating a 23% loss.
Over the past week, the Cardano price has struggled to break above the 200-day EMA, which is currently around $0.982. The presence of significant overhead supply is evident from the long-wick rejections on the daily candles, hindering buyers' efforts to push the price higher. If the selling pressure persists, ADA may experience a slight retracement to regain bullish momentum. According to the Fibonacci Retracement Tool, potential support levels for buyers are at $0.284 (23.6% Fib) and $0.276 (38.2% Fib), which could serve as strong comeback points.
If ADA manages to hold the aforementioned support levels, buyers may have the opportunity to challenge the psychological $0.3 barrier. This level is also in close proximity to a long-standing resistance trendline. However, investors should exercise caution, as a failure to break this dual resistance could indicate a reversal point for sellers to regain control.
While the short-term outlook for ADA appears bullish, a potential rally to the $0.3 level may encounter significant selling pressure due to the confluence with a descending resistance trendline. Historical data suggests that previous retests of this level have resulted in significant price corrections. Therefore, any signs of price rejection at this level could trigger a new correction phase for the Cardano coin.
In conclusion, the ongoing recovery in the Cardano price presents an opportunity for buyers, but they must be aware of the potential challenges ahead. Sustaining the upward momentum, overcoming overhead supply, and breaking the $0.3 barrier will be key factors to watch. Additionally, caution should be exercised in the face of potential selling pressure and the historical resistance trendline. By considering these factors, investors can make informed decisions regarding their ADA holdings.