- Cardano is showing signs of a weakening downtrend, but it must break key resistance at $0.75 to regain bullish momentum.
- Cardano’s declining whale activity raises concerns, though a rebound could drive prices toward $1.
Cardano (ADA) has experienced a significant downturn, shedding over 23% in just one week. However, key indicators suggest that the bearish momentum may be fading, potentially setting the stage for a reversal. As ADA hovers around crucial support and resistance levels, investors are watching closely for signs of the next major move.
Weakening Downtrend: A Glimpse of Hope?
ADA’s Average Directional Index (ADX), a measure of trend strength, has dropped to 23.4, indicating a weakening bearish phase. Typically, an ADX above 25 suggests strong momentum, while a decline below 20 signals stagnation or potential consolidation.
The decreasing ADX suggests that while ADA remains under pressure, the intensity of the downtrend is diminishing. If this trend continues, the market could shift towards consolidation or even a bullish reversal. However, a confirmed trend change would require an increase in buying volume alongside a rising ADX.
Whale Activity Declines: A Cause for Concern?
Large investors, or whales, often play a pivotal role in market movements. Data shows that the number of Cardano whale addresses holding between 1 million and 10 million tokens has dropped from 2,484 to 2,455 in just a week. This decline indicates that whales are offloading holdings, potentially prolonging bearish conditions.
A continued drop in whale activity could fuel further volatility, shaking investor confidence. However, if whales re-enter the market, it could provide the buying pressure needed to drive ADA higher.
Key Resistance and Support Levels to Watch
Cardano’s price trajectory depends on how it navigates the following critical levels:
- Resistance at $0.75: A break above this level could push ADA toward $0.81, with further upside targets at $1.02 and $1.17 if bullish momentum strengthens.
- Support at $0.64: A failure to hold this level may result in a decline towards $0.58, signaling a deeper correction.
The Exponential Moving Averages (EMAs) indicate a period of consolidation, with short-term EMAs still lagging behind long-term ones. For ADA to gain bullish momentum, it must reclaim key resistance levels with strong volume.
Conclusion: Is a Breakout on the Horizon?
Cardano is at a pivotal moment, with declining bearish momentum but uncertain whale activity. If ADA can sustain support and break through resistance, a recovery towards $1 could be possible. However, failure to hold key levels might lead to further declines. Investors should closely monitor price action in the coming days as ADA approaches a decisive turning point.
