Last Updated on July 3, 2022 by Bitfinsider

In the daily period, Cardano’s [ADA] recent decline from the $0.63-level took the form of a down-channel retracement. Together with the horizontal resistance, the 50 EMA (cyan) sped up this decline.

In the next days, the larger trajectory would probably work in favor of the sellers. If the buyers don’t step in at the immediate support level, ADA may have a prolonged slide before a robust recovery.

At the time of publication, ADA was trading at $0.4495, up approximately 0.70 percent in the previous day.

The immediate narrative for the altcoin changed from bullish to pessimistic as the price action dropped below the 20 EMA. Recent bullish attempts to retake important support levels have been rejected by the down-channel.

As the distance between the lower and upper bands of the Bollinger Bands (BB) narrows, the price movement has also entered a tight phase. Following a prolonged squeeze, the alternative would probably experience a period of extreme volatility in the next days.

The bears may aim for a closure below the $0.43-level as a result of the price action shattering the long-term $0.4565-support. Potential targets would be found in this scenario around $0.401. The bearish tendencies might not matter if there is an abrupt purchasing comeback over the Point of Control (POC, red). The sellers’ efforts in this case might be short-lived due to the 50 EMA.

While retesting the 39-mark support, the Relative Strength Index (RSI) adopted a comparatively negative posture. A breach below this support might make it easier for the sellers to find new lows.

Additionally, the Chaikin Money Flow (CMF) closed above the zero-point and confirmed easing in the vigor of the selling. The price movement, however, indicated lower peaks at this period. Therefore, any CMF reversals could validate a bearish divergence.

In addition, the Directional Movement Index (DMI) showed signs of being negative. However, the ADA’s ADX showed a very weak directional trend.

Summary

Sellers finding a breach below the $0.45 mark and the indications tilting downward might lead to more downside risk for ADA. The objectives would not change from before.

To make a smart move, traders and investors need closely monitor Bitcoin’s movement and how it affects the larger market.

Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked.

To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor

Are you new to investing and would like to find out more about investments and cryptocurrency? If you know nothing about a topic and want to become an expert on it, one fool proof way to start is to read good books about the topic.

If you read one book about a topic, you will be able to share knowledge or discuss the topic at an elementary level with almost everyone.

Read three books and you will likely know more than the majority of people and will be able to discuss the topic at an intermediate to expert level.

1. The Intelligent Investor by Benjamin Graham
2. Crypto Investing Guide: How to Invest in Bitcoin, DeFi, NFTs and More by Ian Balina
3. The Basics of Bitcoins and Blockchains: An Introduction to Cryptocurrencies and the Technology That Powers Them by Antony Lewis

Disclaimer: Above are some affiliate links and we may collect a share of sales or other compensation from the links on this page.

Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.