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The price of Cardano has been in a downtrend for the past few days. This led to an increase in bearish sentiment. Over the past 24 hours, ADA has fallen by about 4.2%. Over the past week, the altcoin has depreciated by almost 10%.
These price fluctuations have raised concerns about investor interest in Cardano. The same is reflected in the low buying power and accumulation seen on the charts. Cardano found itself in a range trap with no clear price direction, gradually eroding consumer confidence.
The bears gained momentum, causing an important support level to be broken and subsequently turned into a resistance level for the altcoin. For Cardano to regain its previous price cap, buyers must re-enter the market.
In addition, broader market conditions, including Bitcoin’s consolidation around the $27,000 zone, have prevented many major altcoins, including Cardano, from surpassing their immediate resistance levels. In order for ADA to overcome near-term resistance, it largely depends on the overall strength of the market. There was a decline in market capitalization, further highlighting the increase in sales.
Cardano Price Analysis: One-Day Chart
Cardano was worth $0.35 on the 1-day chart | Source: ADAUSD on TradingView
At the time of writing, the price of ADA is $0.35 and is approaching a significant local support level that has played a decisive role in the past.
The immediate support line is $0.34 and the overhead ceiling is $0.36. The altcoin’s ability to restore resistance levels largely depends on the ability of the bulls to defend the price above the nearest support level.
If the current level declines, the coin will likely drop to $0.34 initially, and if the selling pressure continues, it could drop to $0.33. It is worth noting that the trading volume of Cardano has decreased over the last session, indicating a decrease in purchasing power.
Technical analysis
Cardano recorded low purchasing power on the 1-day chart | Source: ADAUSD on TradingView
Since ADA fell below the $0.38 price level, its purchasing power has not recovered. The Relative Strength Index (RSI) is below 40, indicating that the ADA is approaching the oversold zone on the daily chart.
In addition, the price of the asset fell below the 20-Simple Moving Average line, which indicates that the sellers have taken control of the price momentum of the market.
Cardano’s 1-Day Sell Signals | Source: ADAUSD on TradingView
ADA generated sell signals based on various indicators, suggesting a possible price decline. The moving average convergence-divergence (MACD) indicator, which shows price momentum and reversals, displayed red histograms associated with altcoin sell signals.
In addition, the Directional Movement Index (DMI), which is responsible for indicating the direction of the price, showed a negative trend, while the -DI (orange) line was located above the +DI (blue) line. This indicates bearish sentiment in the market.
The Average Direction Index (ADX) also tried to rise above 20. However, this indicates a lack of strength in the current price trend.
