Cardanos ADA plummets by 10 in one day raising concerns about future price movements
Despite its widespread popularity and technological advancements, Cardano (ADA) has found itself caught in the downturn affecting the entire cryptocurrency market by the close of the initial week of July. Surprisingly, the token defied traditional technical analysis (TA) expectations with its recent decline. Despite initial indications that ADA’s downward trend might be reversing when it formed a falling wedge breakout pattern at the beginning of the month, leading to predictions of a potential 70% surge, the currency’s price took an unexpected downturn.
Following a brief surge that saw ADA flirt with $0.42 on July 3, the coin saw a sharp drop, plummeting to lows of $0.3211 on July 5. Despite breaching the immediate support level near $0.35, Cardano managed to stave off a free fall by holding above the secondary support level, rebounding to $0.34459 by the latest update.
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Nonetheless, Cardano remains in a delicate position, with a noticeable downward trend prevailing across the cryptocurrency landscape that has seen many other coins and tokens experience significant declines in recent days.
The question now is whether Cardano is poised for a rally or a further descent. The prevailing bearish sentiment is underscored by Cardano’s overall performance in recent weeks, with only 12 positive trading days out of the last 30 and the coin trading well below its 200-day simple moving average of $0.536241.
Unlike more established cryptocurrencies like Bitcoin (BTC), which, while not sustaining their March peaks, managed to avoid major drops, ADA briefly hovered near its yearly high of $0.77 and then steadily declined below $0.50 by mid-April.
Nevertheless, despite these challenges, a case for optimism can be made for Cardano based on its technological progress and positive metrics. Just in the past week, the network introduced a new node and a new Plutus version, with the number of smart contracts on the Plutus network surpassing 62,000.
Even if a bullish scenario were to unfold, it’s unlikely that Cardano will consistently breach $0.40 in the immediate future, as it would have to overcome the nearby resistance level around $0.39. However, if it manages to do so, it could potentially reclaim prices above $0.50, especially if broader market trends turn decidedly positive.
Disclaimer: The information provided in this article should not be construed as investment advice. All investments carry inherent risks, and investors should exercise caution.
