Cardano (ADA) price analysis: will the outperformance continue?
ADA could remain volatile in the short term
- Cardano technical analysis: Weekly chart
- Cardano technical analysis: Daily chart
- Cardano: Buy or sell at current levels?
The crypto markets remain under intense selling pressure, but Cardano’s ADA token has been outperforming in the short term. The buyers are trying to defend the crucial support at $0.44 as of 15 June 2022.
While traders fear a bear market, Cardano creator Charles Hoskinson remains comfortable because, according to him, major advancements happen during the bear phase. In an interview with Yahoo! Finance, Hoskinson said: “Bull markets are really frustrating because nobody wants to cooperate. You have a lot of poaching [of talent], unrealistic wages and unrealistic expectations. Bear markets are actually quite comfortable. Those are the building parts.”
Another bullish voice for the future came from GeroWallet co-founder Shawn Roller, who said in a tweet that despite the bear market, projects on Cardano have continued to make announcements.
IOHK, the company behind the Cardano ecosystem, announced the rollout of its Ethereum Virtual Machine (EVM) sidechain alpha on testnet. The EVM will facilitate developers to build Solidity-based applications on the Cardano network. The tweet also talked about an “interoperable” future, where different blockchains could interact with each other.
In a Twitter poll by London Real TV, 77% of respondents voted that during the bear market, they are holding Cardano the most compared to other cryptocurrencies.
Could Cardano maintain its short-term outperformance? Will ADA go up? Read the ADA price analysis below to find out what the charts suggest.
Cardano technical analysis: Weekly chart
ADA’s price remains in a strong downtrend, as efforts to start a relief rally met with stiff resistance above $0.68. The down-sloping 20-week exponential moving average (EMA) and the relative strength index (RSI) near oversold territory indicate that bears are in command. If the $0.44 support cracks, the pair could drop to $0.34.
Alternatively, if the price rebounds off the current level, the buyers will make another attempt to clear the overhead hurdle at $0.68. If they manage to do that, the ADA/USD pair could rally to the 20-week EMA.
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This is an important level to keep an eye on, because if the price turns down from it, the bears will attempt to resume the downtrend. On the other hand, if buyers drive the price above the 20-week EMA, it will suggest a potential change in trend. The pair could then attempt a rally to $1.20.
Cardano technical analysis: Daily chart
ADA’s price has formed a broadening formation, indicating increased volatility. The price has dipped down close to the support of the formation where buyers are expected to arrest the decline and start a rebound. If that happens, the pair could rise toward the resistance of the formation.
The next trending move is likely to begin after the price breaks above or below the formation. If the price slips below the support, the selling may intensify and the pair could decline to $0.34 and later to the pattern target of $0.24.
To the contrary, if bulls drive the price above the broadening formation and the downtrend line of the falling wedge pattern, it will signal the start of a new uptrend. The pair could first rally to the pattern target of $0.84 and then to the psychological level of $1.
Cardano: Buy or sell at current levels?
Cardano’s price analysis shows a broadening formation. If the price slips below the formation, a drop to $0.34 is likely. But if the price rebounds off the support line, the pair could rally to $0.65. A break above the formation could indicate a potential change in trend..
Whatever the outcome might be, your decision to trade depends on your attitude to risk, your expertise in this market, the spread of your investment portfolio and how comfortable you are about losing money. This analysis does not constitute investment advice. It’s important to make your own analysis before deciding to invest. You should never invest more than you can afford to lose.