Cardano: Here’s why ADA’s recovery path looks bleak despite demand at $0.4.


Disclaimer: The results of the following analysis are the sole opinions of the authors and should not be construed as investment advice.

There have been some positive developments behind Cardano over the past few days. The Cardano community voted for Project Catalyst Fund 7 in March and will soon vote for Fund 8. This venture will be used to develop the Cardano ecosystem with a particular focus on the NFT sector.

Another positive news is that addresses holding ADA hit an all-time high of 5.2 million in April. However, there have been accusations that Cardano is a “ghost chain”.

ADA also underperformed on the charts as the decline continued in November.

ADA- 1 day chart

Source: ADA/USDT on TradingView

The bearish wedge pattern showed a breakout in mid-March, but the rally was unable to break the key level at the $1.26 mark. The seller has been emboldened by this development and has since relentlessly drove ADA south to $0.4.

As of this writing, the entire cryptocurrency market has rallied in relief, with ADA being one of the coins to record double-digit percentage gains in 24 hours. However, trends and market structures remain overwhelmingly bearish. $0.8-$0.9 may offer a sell or sell opportunity.

rationale

Cardano: ADA found demand at the $0.4 level, but the tech sector remains bearish.

Source: ADA/USDT on TradingView

The mid-March rally was the only time the RSI in 2022 remained above its neutral 50 for several days in a row. Otherwise, the RSI is below this indicator, indicating a bearish trend. At the time of writing, the RSI was recovering from a decline to 24.24.

The Stochastic RSI also formed a bullish crossover in the oversold zone in response to the rebound from the $0.4 mark. However, the OBV has been in freefall in recent days and has yet to show any signs of recovery.

conclusion

Buyers beware, as the trend favors sellers. Winter arrived a few months ago, and there was no sign of thawing, let alone spring. If the ADA can cross the $0.9 mark, the bearish structure will be broken, in which case the $0.6 and $0.78 levels could test again as support.

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