Cardano price drops to $1.03 on crypto sell-off
ADA/USD rebounds to $1.14 but still vulnerable after declining 10% over 24 hours
Cardano dropped nearly 10% on Thursday to see lows of $1.07 and then continued to feel the bearish pressure in early trades today as prices touched support at $1.03.
The drop signalled some weakness in Cardano’s remarkable rally over the past few weeks, with the likely bearish turn starting to appear after bulls reached an all-time high of $1.48 last week.
At the time of writing, ADA/USD is trading around $1.12, with bulls displaying conviction in the past two hours.
If the upside signal strengthens, buyers could push for a break above $1.20 as they target higher levels. On the contrary, ADA could also drop to $1.00 or lower.
ADA/USD price short term outlook
ADA/USD broke below the support line of an ascending parallel channel and retested the 20-day exponential moving average at $1.08. While it completed a five-day downward streak, the decline to lows of $1.03 signalled further weakness.
Cardano’s price could thus see more losses if bulls fail to react and retake control above the lower boundary of the old channel.
The Relative Strength Indicator (RSI) hints at added downward pressure with bearish divergence, while MACD has the histogram printing below the signal line to suggest an influx of selling pressure if the indicator validates a bearish crossover.
If ADA price turns negative from current levels, bulls will rely on a few key support levels to prevent further losses. The initial support lies at $1.08, which is where we have the 0.382 Fibonacci retracement level of the upswing from $0.43 to $1.48.
There’s also an ascending trend line (blue, dotted) near the Fib level and if bears break lower, the primary support is at the 20-day EMA ($1.06) and then the psychological $1.00 level.
Further rot for ADA/USD could see bulls battle to keep prices above the 0.5 Fib retracement level ($0.965) and the 0.618 Fib retracement level ($0.83).
On a positive note, ADA/USD remains in an uptrend and could very well make another all-time high in the short term if bulls hold above $1.00. This will call for buyers to break above immediate resistance at $1.14, with a run to $1.20 bringing into focus the 0.236 Fib level ($1.23).
A break into and continuation inside the rising channel could see prices rally to the apex resistance line, which extends past the all-time high of $1.48. From here, buyers can attempt to set another record. In this case, short-term targets are likely to be $1.60 and $2.00.