A Cardano Leg Down? Analyst Raises Alarm

Analysts from Crypto Capital Ventures are predicting a leg down on Cardano (ADA) based on the current market events. 

The analyst analyzed the current market trends of Bitcoin (BTC) and Cardano, highlighting the importance of calm and data-driven decision-making amidst cryptocurrency volatility. He opens by examining resistance channels on the daily charts for Bitcoin and Cardano, advising retail investors to step back from the market possibly. A noteworthy point is the upward movement of the US dollar currency index, flagged as a potential bearish sign for cryptocurrencies. This comes as analysts also speculate a bottom on the altcoin soon.

Speaking further on Bitcoin, the analyst revealed Bitcoin’s struggle with a lower high Fibonacci channel, alongside weak momentum oscillator bounces and lower highs. The cryptocurrency is consolidating just above the 200-day moving average, suggesting a potential period of consolidation in the 40s, with the 20-day moving average providing short-term support clues. The analyst also compared Bitcoin’s current situation to its last cycle for additional insights.

The analyst further states that Cardano’s situation mirrors Bitcoin’s last cycle, which was overextended and consolidating above the 20-week moving average. He emphasized the significance of setting emotions aside to allow cryptocurrencies to consolidate, similar to the previous cycle. 

The analyst compares Cardano’s current state to the last cryptocurrency cycle, noting its consolidation and dip, akin to mid to late December of the previous cycle. Despite falling dominance, the analyst noted the formation of higher lows for Cardano, a trend consistent with the previous cycle, and highlighted the importance of monitoring the lower trend line and Bitcoin dominance in anticipation of the Bitcoin halving. This comes as analysts also speculate a Cardano pump to $1.5.

How Is Cardano Doing Today?

Analysing Cardano charts, we notice that the Cardano price has been on a downtrend, as evidenced by the series of red candlesticks moving away from the upper Bollinger band and towards the lower band. On the other hand, there has been increased volatility and a strong downward movement as the price is trading at the lower end of the Bollinger Bands. The MACD line is below the signal line and extends further below it, which suggests a strengthening bearish momentum. The histogram also shows an increase in bearish momentum, increasing in length below the zero line.

The RSI is well below 50, nearing 30, typically indicating oversold conditions. However, it has not yet crossed above 30, suggesting a potential reversal from the oversold territory. If the price starts to close above the 20-period SMA, it could also be an early sign of a potential trend change. However, as long as the price remains near or below the lower Bollinger Band, with the MACD histogram expanding below the zero line and the RSI below 50, the bearish outlook remains.

1-hour SOL/USD Chart | TradingView

Conversely, the Awesome Oscillator (AO) shows red bars, and its value is negative, suggesting bearish momentum. The increasing size of the red bars further confirms this downward trend. Additionally, the price shows a clear downtrend with a sharp decline, as evidenced by the red candles consistently forming lower lows.