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The price of Cardano has experienced significant volatility over the past few weeks. The altcoin initially rose from $0.37 but was later rejected by $0.45. However, over the past 24 hours, there has been a slight increase of 1.3%, while the weekly chart shows a price increase of 6.2%.
The ADA technical analysis suggests that the bulls are trying to take control of the price. Demand and accumulation showed signs of recovery.
Despite the slow rise in the price of ADA, there is a critical resistance level that must be overcome in order to trigger a rally. In order for the bulls to gain further momentum, purchasing power needs to increase significantly in the upcoming trading sessions.
Also, the major altcoins are stagnant with bitcoin barely reaching $30,000. If BTC recovers this level, it could push the ADA bulls to increase the price in subsequent trading sessions. In addition, ADA’s market capitalization has rebounded, indicating that buying pressure is returning to the market.
Cardano Price Analysis: One-Day Chart
Cardano was worth $0.40 on the 1-day chart | Source: ADAUSD on TradingView
At the time of writing, ADA is trading at $0.40. Upper resistance was $0.42. In the past, this level has proven to be a major hurdle for Cardano, and numerous attempts to overcome it have failed.
However, if ADA manages to rise above this resistance level, it could trigger a rally and push the price towards $0.46.
On the other hand, if the price falls from the current level, the support level is $0.39. If ADA fails to hold above this support level, it could send the price down to $0.36. The amount of ADA traded in the last session turned green, indicating an influx of buyers.
Cardano sees a recovery in purchasing power on the 1-day chart | Source: ADAUSD on TradingView
Despite a slight uptick in demand for ADA, purchasing power has declined slightly on the daily chart. The Relative Strength Index remains above its midline, suggesting that buyers are still in control of the market.
However, Cardano’s movement below the 20-Simple Moving Average line indicates that sellers may take over soon as demand is not adequate. This reading implies that the sellers control the price momentum in the market.
Cardano’s 1-Day Sell Signals | Source: ADAUSD on TradingView
ADA generated sell signals in accordance with other indicators. The convergence-divergence of the moving averages showed red histograms below the middle line, indicating a sell signal based on price momentum and reversals.
The Directional Movement Index was negative, indicating negative price action, with the -DI (orange) line above the +DI (blue) line. The Average Direction Index (red) was approaching 20, indicating that the current price action lacks strength.