Cardano (ADA) continues to face challenges in the highly volatile cryptocurrency market, significantly impacted by selling pressure. As of Wednesday, ADA’s price fell by 0.6%, dropping below the $0.4 threshold and struggling to find support above this level. The price movement indicates a downtrend characterized by lower highs and lower lows, with the price trading below both the 50-day and 200-day exponential moving averages (EMAs), suggesting continued downward pressure unless market conditions improve.
ADA’s Technical Outlook Indicates a Downtrend
ADA‘s primary support is around $0.30, highlighted by the lower boundary of the descending channel and past price data. If the downward momentum continues, the altcoin could potentially fall further, reaching a significant support level at $0.3165 and possibly hitting the year’s lowest level. The nearest resistance on the upside is at $0.42, aligned with the 50-day EMA, while stronger resistance is at $0.50, where the 200-day EMA and previous highs converge.
Currently, technical indicators for ADA present a mixed outlook. The Relative Strength Index (RSI) stands at 45.63, indicating a neutral stance but leaning towards the oversold region. This suggests potential for further decline before any recovery. Additionally, the Chaikin Money Flow (CMF) indicator at -0.07 reflects stronger selling pressure compared to buying pressure, confirming the bearish trend.
On-Chain Data Also Negative
On-chain data also supports the bearish outlook for ADA. Data from Santiment reveals a significant decline in Cardano’s on-chain volume since March, recently dropping from $11.5 billion to around $1.5 billion. This decrease in volume indicates reduced activity and interest in the ADA network.
Similarly, data from Coinalyze shows a slight increase of 1.81% in ADA’s open interest, indicating minimal new capital inflow into ADA, while the daily funding rate shows a small increase.
In a recent development, the U.S. Securities and Exchange Commission (SEC) revised its classification of ADA, no longer considering it a security in its ongoing case against Binance. This change is expected to have positive effects on ADA and the broader cryptocurrency market, potentially influencing future ETF approvals and regulatory clarity.
