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Vikram
May 13, 2022
by Vikram

ADA Technical Analysis: Relief Rally Consoles Cardano Investors

ADA
ADA price floats above the psychological mark of $0.50 with a morning star. But will the uptrend sustain despite low volume support?

Key technical points:

  • The ADA prices display six consecutive red candles on the weekly time frame chart

  • The K and D lines represent a bullish crossover.

  • The 24-hour trading volume of Cardano is $2.49 Billion, indicating a 24% fall. 

    • Past Performance of ADA

    The April 11th fallout from the $1 support indicated the failed attempt of ADA buyers to reclaim this psychological level. The renewed selling pressure dumped altcoin 22% lower to March's bottom support of the $0.75 mark. However, responding to widespread bearish sentiment in the crypto market, the sellers continued to pressure the coin and breached the $0.75 mark.

    TradingView Chart

    ADA Technical Analysis 

    A bearish breakdown from $0.75 support accelerated the ongoing sell-off and dumped the ADA price 42.5% down to the $0.4 mark. Furthermore, the buyers attempt to bounce back from this new lower low, but a low volume bullish reversal suggests the price may soon follow the prevailing downtrend.

    The crucial daily EMAs maintain a bearish trend in a descending trendline, with the 50-day EMA providing dynamic resistance. 

    The RSI slope spikes above the oversold zone and cracks above the 14-day average but remains under a lower low formation. To break the downtrend, the RSI values must surpass the halfway line, which will ignite a new bullish trend.

    The Stochastic RSI displays a bullish crossover when the K line crosses over the D line within the oversold zone and teasing the start of a new bull market.

    Therefore, the momentum indicators show a bullish transition and suggest a trend reversal.

    In short, the ADA technical analysis forecasts a relief rally to the $0.75 mark.

    Upcoming Trend

    If the ADA buyers continue to surge higher, the altcoin will hit the aligned resistance of $0.75 and 20-day EMA. However, the coin price has a high possibility of reverting from this resistance and rechallenged the bottom support of $0.4.

    Conversely, the ADA price would breach the overhead resistance to kickstart a new recovery rally in a solid bullish case scenario.

    Support Levels: $0.4 and $0.26

    Resistance Levels: $0.75 and $1

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    ADA Technical Analysis: Relief Rally Consoles Cardano Investors
    Vikram
    Vikram is a technical analyst with several years of experience in the crypto market & Indian Equity and F&O Segment. He loves to learn anything and everything related to finance. He possesses strong technical and analytical skills, which he leverages to acquaint our audience with upcoming price trends for different coins.

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