Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Cardano’s price has been consolidating for over a week now, with ADA continuing to trade near the $1 price point. Despite the strong bullish momentum on the charts, however, ADA has had to endure a prolonged period of sideways movement lately.
At the time of writing, the cryptocurrency was trading at $0.91, with ADA registering a market capitalization of over $27 billion. In the last 24 hours, not only did much of its bullish momentum fade, but the market’s bears seemed to creep into the market again as well.
Cardano 1-day chart
Source: ADA/USD, TradingView
According to its daily chart, ADA’s price lost all the momentum that had fuelled its bull run in the first week of February. The crypto’s price was observed to have consolidated for over a week after having failed to breach its immediate resistance around ADA’s present ATH. This makes it difficult to predict which direction the coin may move in over the coming days. Hence, it is unclear whether traders are likely to benefit from a short or a long position.
However, keeping the overall market trend in mind, it is safe to say that in the coming week’s time, if the coin fails to breach the resistance level, it is likely to head to its immediate support at $0.76. The next strong support level for ADA lay around the $0.38-range, but such a drastic drop in price can be ruled out given the market’s conditions.
The technical indicators for ADA seemed to be signaling a trend reversal. While the RSI indicator was in the overbought zone for an extended period, the same was moving away at press time, indicating that the buyers’ market was transforming into a sellers’ market. The same was deduced from the MACD as well. The indicator may soon undergo a bearish crossover since the Signal line was continuing to move towards the falling MACD line.
Despite Cardano’s promising performance at the start of the year, its crypto-market seemed to be lacking in bullish momentum to push the coin above the prized $1-mark and flip its immediate resistance to support. Over the next 7 days, if the resistance level is not breached, then traders can expect a slight price correction to occur as a result of the prolonged period of consolidation.
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