Cardano Expected to Fall Further Below $0.406
Contributor
- ADA drops 7.43% in 7 days with strong bearish bias.
- Key indicators point to a continued bearish bias as ADA attempts to create another support level.
Cardano [ADA] has reported a decline in the last 30 days. In the last seven days, it has reported a price decline of 7.43%. ADA was trading at $0.4074 at press time with a 24-hour volume increase of 15.32% to $213 million.
According to coinmarketcap, ADA has a market cap of $14.5 billion, up 1.13% in 24 hours.
Source: Tradingview
AskFX’s analysis has shown that ADA is on the verge of a breakdown. The drop below $0.406 will create another support level.
A bearish bias will persist until the structure changes or another strong support is established. So, current trading shows that the market has a sustained bearish bias that will continue until downside support emerges at around $0.356.
Should there be a reversal at $0.403, the move will push prices to $0.487. However, the current market trend is bearish and seems to be here to stay.
Source: Tradingview
In fact, at press time, ADA has a negative CMf of -0.15, indicating increased selling pressure. Generally, a negative CMF indicates a solid bearish trend that could continue.
With higher selling pressure, prices decline as there are more selling than buying.
ADA Market Sentiment
According to Coinglass, there is a reduced ADA weighted funding rate. Generally, lower funding rates imply that shorts are paying long positions, indicating a bearish trend and sentiment.
When futures trade at a discount to spot, it puts downward pressure on prices.
Source: Coinglass
Likewise, Santiment’s data on ADA’s total open interest in USD indicates reduced trading activity. Reduced open interest shows fewer trades in the futures markets, resulting in thin order books.
Such a change in market sentiment leads to increased volatility in trading volumes. These changes indicate a bearish trend as forced liquidations occur.
How far can ADA fall?
Various indicators show that ADA is in a strong bearish trend. The breakdown below the local weak support level of $0.403 will cause the bearish bias to continue.
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However, in the event of a structural change or the establishment of a new level, the market will see a reversal.
In this sense, a potential reversal can push the market to $0.489 while creating a new resistance level at $0.505. However, until the structure changes, the trend will remain bearish.
