Cardano (ADA) fell back below the crucial support level of $0.3389, raising fears of an extended bearish phase. This level has previously remained a strong line of defense for ADA, but its recent breakout suggests that sellers may have the upper hand. With ADA moving lower, investors are wondering if this slippage could open the door to a deeper downtrend.
As the bears tighten their grip, this article aims to analyze the recent decline of ADA below the critical support level of $0.3389 and assess the possibility of a deeper downtrend emerging. By exploring technical signals and market dynamics, this article will provide readers with a clear understanding of ADA’s current position, potential risks, and paths forward in the face of increasing downward pressure.
Technical Analysis: Is ADA Ready for More Slippage?
On the 4-hours chart, ADA recently fell below the $0.3389 level, and its price is now showing strong downward momentum as it trades below the 100-day simple moving average (SMA). This position below the simple moving average (SMA) is a leading indicator of a potential long downward move, indicating that the sellers are currently in control. If the selling pressure continues, the $0.2388 level will become an important area to watch.
Also, the ADA 4-hour Composite Trend Indicator is showing negative signs, as both the SMA and the signal line have fallen below zero and are approaching the oversold zone. Typically, this movement indicates that selling pressure is increasing, indicating that sellers are becoming increasingly dominant in the market.
On the daily chart, Cardano is showing clear bearish strength, highlighted by a bearish candlestick pattern indicating increasing selling pressure below the $0.3389 level. This pattern indicates that sellers are firmly in control of the market, driving the price relentlessly lower, leading to a strong possibility of further losses in the near term.
An in-depth examination of the one-day compound trend oscillator reveals that Cardano is likely to experience long-term losses. After failing to break above the SMA line, the signal line is turning lower and moving towards the oversold zone, indicating a significant negative shift in momentum. If this downtrend continues, Cardano may face significant challenges in achieving recovery, which could lead to an extended period of slow price movement.
Key levels to watch in the coming days
As Cardano faces a challenging market landscape, investors should keep an eye on several key levels in the coming days. Attention should be directed towards the support level at $0.2388, which may provide crucial protection against further downturns. If ADA maintains its position above this limit, it could pave the way for a potential recovery, with the aim of reaching the $0.3389 level or higher.
Conversely, if ADA drops below the $0.2388 support level, it could indicate a deeper downtrend, triggering potential declines towards other support levels and triggering increased selling pressure.