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10/09/2024

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Cardano (ADA) Testing $0.34 Support – On-Chain Data Suggests Price Consolidation

Cardano (ADA) is now at a crucial price level after weeks of intense volatility and uncertainty. Following a dramatic series of price swings—first a 27% surge, then a 20% retrace, then a 10% rise, and now a...

Cardano (ADA) Testing $0.34 Support – On-Chain Data Suggests Price Consolidation
Cardano (ADA) Testing $0.34 Support – On-Chain Data Suggests Price Consolidation

Cardano (ADA) is now at a crucial price level after weeks of intense volatility and uncertainty. Following a dramatic series of price swings—first a 27% surge, then a 20% retrace, then a 10% rise, and now a 7% dip to $0.34—Cardano finds itself at one of its most critical support levels. Holding this level is essential for bulls to maintain momentum and avoid a deeper decline.

Market data from Coinglass indicates that ADA may be entering a consolidation phase, often preceding a significant price move. Investors and traders closely watch this level, as it could determine whether Cardano is poised for a bullish breakout or a deeper correction. 

With the entire crypto market in a state of anticipation, ADA’s upcoming price action will be key in signaling its next trend. As sentiment remains mixed, this consolidation period will likely set the tone for Cardano’s direction in the coming weeks.

Cardano Funding Rate Suggests Market Consolidation

Cardano (ADA) is showing signs of entering a potential consolidation phase, a crucial moment for investors as they evaluate the next move. Recent on-chain data highlights a surge in large transactions followed by stabilization, suggesting that the market is cooling off after weeks of volatility. This stabilization could pave the way for more balanced price action as ADA hovers around a key support level.

Coinglass data further reinforces the consolidation narrative. The ADA Open Interest (OI)-Weighted Funding Rate has declined yet remains positive. A declining but positive funding rate indicates that demand for ADA is slowing down, but not to a degree where the market expects heavy short-selling.

Cardano OI-wheighted funding rate declining.
Cardano OI-Weighted funding rate declining. | Source: Coinglass

In crypto, when funding rates dip but stay in positive territory, the market consolidates rather than preparing for a sharp downward movement. This suggests that while ADA’s upward momentum has slowed, there isn’t yet an overwhelming bearish sentiment.

If ADA manages to hold above current levels during this consolidation phase, it would signal healthy price action. The key is whether bulls can defend these levels, potentially leading to a more sustained rally in the weeks ahead. Investors must monitor these indicators closely as the market tests ADA’s resilience.

ADA Testing Crucial Support

Cardano (ADA) is currently trading at $0.34 after failing to reclaim two critical levels: the 4-hour 200 moving average (MA) at $0.356 and the 200 exponential moving average (EMA) at $0.359. These indicators are crucial for ADA to regain bullish momentum, and their rejection signals potential weakness in the price action.

ADA testing crucial demand after losing both 1D 200 MA & EMA.
ADA testing crucial demand after losing both 1D 200 MA & EMA. | Source: ADAUSDT chart on TradingView

Despite this, ADA is still holding above a key support level at $0.34. If this level is lost, the price could face a significant retracement, with lower demand levels around $0.32 and potentially $0.30 being tested. This makes the $0.34 support critical for maintaining current market sentiment.

Conversely, if ADA can reclaim the 4-hour 200 MA and 200 EMA, breaking above $0.36, it could set the stage for a rally toward higher resistance levels. The next significant supply zone to watch would be around $0.41, where further bullish momentum could face its next challenge. 

The coming days will be pivotal for ADA as it consolidates and prepares for its next move. Investors are closely monitoring these key technical levels to gauge the short-term direction of the price action.

Featured image from Dall-E, chart from TradingView

Sebastian Villafuerte

Sebastian's journey into the world of crypto began four years ago, driven by a fascination with the potential of blockchain technology to revolutionize financial systems. His initial exploration focused on understanding the intricacies of various crypto projects, particularly those focused on building innovative financial solutions. Through countless hours of research and learning, Sebastian developed a deep understanding of the underlying technologies, market dynamics, and potential applications of cryptocurrencies.

To share his insights with others, Sebastian became an active contributor to online discussions on platforms like X and LinkedIn. His focus on fintech and crypto-related topics quickly established him as a trusted voice in the online crypto community. Sebastian's goal was to educate and inform his audience about the latest trends and insights in the rapidly evolving crypto landscape.

To further enhance his expertise, Sebastian pursued a UC Berkeley Fintech: Frameworks, Applications, and Strategies certification. This rigorous program equipped him with valuable skills and knowledge regarding Financial Technology, bridging the gap between traditional finance and decentralized finance. The certification deepened his understanding of the broader financial landscape and its intersection with blockchain technology.

Sebastian's passion for finance and writing is evident in his work. He enjoys delving into financial research, analyzing market trends, and exploring the latest developments in the crypto space. In his spare time, Sebastian can often be found immersed in charts, studying 10-K reports, or engaging in thought-provoking discussions about the future of finance.

Sebastian's journey as a crypto pioneer has been marked by a relentless pursuit of knowledge and a dedication to sharing his insights. His ability to navigate the complex world of crypto, combined with his passion for financial research and communication, makes him a valuable contributor to the industry. As the crypto landscape continues to evolve, Sebastian remains at the forefront, providing valuable insights and helping to shape the future of this revolutionary technology.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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