(Akash Girimath – FXStreet)
– Cardano price faces a stiff resistance level at $0.550 with no discernable signs of a bullish breakout.
– A rejection at $0.550 or the 100-day EMA at $0.576 could trigger a crash to $0.434 or $0.419 support levels.
– A daily candlestick close that flips the 100-day EM at $0.576 will invalidate the bearish thesis for ADA.
Cardano price has attempted and failed to overcome a crucial resistance level thrice over the last month. This failed attempt is likely to see a potential downswing if ADA bulls fail to keep up.
Cardano price readies for its next leg
Cardano price formed a range, extending from $0.380 to $0.609, between May 12 and 13. Since then, ADA has spent a lot of time in the lower half region of the said range. Although the recent recovery above the midpoint at $0.494 showed promise, the bulls have been unable to move through the $0.550 hurdle even after multiple attempts in the last three weeks.
There are two ways this situation for ADA can resolve:
- Cardano price slices through the $0.550 hurdle and promptly gets rejected at $0.576 by the 100-day Exponential Moving Average (EMA), or simply goes down from its current position.
- A flip of the $0.550 hurdle into a support floor triggers a rally into the range high at $0.609.
Judging from the recent Bitcoin price rejection at the $24,989 resistance level, a downswing seems more apt. Therefore, investors should prepare for a move toward the 30-day and 50-day EMAs at roughly $0.51.
A breakdown of this level will allow ADA to retest the midpoint of the aforementioned range at $0.494. If investors have shorted the move, $0.494 would be a good level to book partial or full profits.
However, a surge in selling pressure could further knock Cardano price to the support levels at $0.434 and $0.419.
On the other hand, if Cardano price moves past the $0.550 hurdle and converts it into a support level, investors can expect a retest of the 100-day EMA at $0.576.
If buyers band together and overcome this barrier, it will invalidate the bearish thesis and trigger Cardano price to rally and revisit the range high at $0.609.