Cardano: In case you are a excessive threat dealer this step is for you – AMBCrypto Information

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Disclaimer: The results of the following analysis are the sole opinions of the author and should not be construed as investment advice

Since the crypto sell-off on May 19, Cardano has moved largely parallel to the king coin. This was backed up by the fact that its correlation coefficient with Bitcoin rose steadily from 0.64 to 0.80 in just two months. This metric can act as a double-edged sword at times and unfortunately the price for ADA has been on the receiving end due to a declining broader market.

ADA’s price was nearly 60% below its May 16 ATH at press time, with the altcoin trading at $ 1.04, down 10% in the past 24 hours.

Cardano 4 hour chart

Source: ADA / USD, TradingView

The increased network activity and lined updates from ADA support a bullish narrative long-term, but their short-term movement remains questionable. Descending channel degradation occurred 16 days after the pattern was formed. ADA’s next target appeared to be its June 22 swing low of $ 0.998 to $ 0.978 – a region that slumped during its initial decline in May and later in late June.

In the next few sessions, ADA could cap its losses in this zone before buyers return to the market.

argumentation

The Relative Strength Index has been trading in the oversold territory – an area that usually causes price reversal. As the overall market structure was still bearish, the forecast reversal is more temporary than a trend reversal. This was confirmed by the -DI of the Directional Movement Index, which gained distance from the + DI and indicated a rising downtrend.

The ADX hit 38, which meant the market was highly directional and the chances of a longer decline were high. ADA saw a period of slight growth between July 9th and 12th, according to On Balance Volume, but selling pressures have dictated market moves since then.

Conclusion

ADA’s indicators offered the possibility of a longer decline towards the defensive zone from $ 0.998 to $ 0.978. However, the bulls of the market could attempt to crack incoming losses in this zone – a development that could even result in a small rally over the next 24 hours.

Traders could opt for Long ADA once they near this support zone and exit their positions at $ 1.086 – an entry that would highlight gains of 9-10%. However, a longer decline seemed possible and longing ADAs are only allowed to be performed by traders with a high risk appetite.

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