2 - 3 minute read
The Cardano (ADA) price has decreased significantly in recent weeks, falling below a crucial support level and invalidating a potential bullish divergence in the relative strength index (RSI). This bearish signal could potentially lead to a 40% drop in the price of ADA, the native cryptocurrency of the Cardano platform.
ADA has been following a long-term descending resistance line since reaching an all-time high of $3.101 in August 2021. The downward movement led to a low of $0.255 in December 2022 and caused a breakdown from the $0.350 horizontal support area, which is now expected to provide resistance. The next closest support area is at $0.150, representing a further 40% drop from the current price.
In addition to the bearish price action, the invalidation of the bullish divergence in the weekly RSI is a negative sign for the Cardano price. This was the only potential bullish indicator remaining, so the most likely forecast for ADA is a drop toward the $0.150 support area. To indicate a bullish trend, the price would need to break out from the descending resistance line and reclaim the $0.350 area.
It is worth noting that the Cardano price has been relatively stable in the past, with relatively slow and steady increases and decreases. However, the cryptocurrency market is highly volatile and it is important for investors to be aware of the risks involved. It is always advisable to do your own research (DYOR) before investing in any cryptocurrency, as well as to diversify your portfolio and not put all of your eggs in one basket.
The Cardano platform, which was created by Charles Hoskinson, uses the proof-of-stake (POS) consensus mechanism and focuses on smart contracts and decentralized applications. Hoskinson recently made headlines with his comments about the XRP community and his decision to no longer answer any questions related to XRP or Ripple. However, there have been no other significant developments or news related to Cardano that could explain the recent drop in the price of ADA.
The bearish signal for Cardano could lead to a significant drop in the price of ADA. Investors should be aware of the risks and should carefully evaluate the potential for success before investing in any cryptocurrency. Diversification and careful research are key to minimizing the risks of investing in the volatile cryptocurrency market.