Cardano Price Breaks $1 Support, Approaches Reversal Point

Summary:
• Cardano price has deviated significantly from its correlation with Bitcoin price and is fast approaching a key support. Here's what it means.

Cardano price broke below the $1 psychological support mark on Thursday as the broader crypto market slumped. ADAUSD traded at $0.973 at the time of writing, having inched up by 0.6%. Nonetheless, the coin has lost 10% of its value in the last week, injecting a sour sentiment in the market.

Cardano price flashes red flags

ADA price trades below key moving averages, including the 9-day and 21-day EMA and 9-day SMA levels. This denotes weak traction that could be exacerbated by the breach of the $1 support. In addition, the value of its perpetual Open Interest perpetual contracts declined by 5.63% in the last 24 hours, signaling declining investor confidence.

Also, the crypto coin has formed a double-top pattern on the daily chart, adding credence to the bearish view. The chart below shows that ADA currently trades marginally above the pattern’s neckline at $0.970. A break below that level could potentially clear the path for an extended decline.

Is there hope for Cardano price reversal?

According to analytics site, IntoTheBlock, Cardano price has a weak correlation with Bitcoin price, at 0.26. That means a potential using by the coin will not entirely depend on Bitcoi’s trajectory.

Also, the $0.970 mark has served as a support level for the last three weeks, with multiple rejections of breaches below that level in recent days. Furthermore, 30% of ADA holders are currently “Out of the Money”, signaling a lack of motivation to sell. That could provide downward support for the token and limit the downside.

Cardano price prediction

Cardano price pivot mark is at $0.970 and the upside will prevail if action stays above that level. Also, the momentum indicator signals control by the buyers. In that case, the price will likely meet the first resistance at $0.990. However, if the buyers extend their control, ADAUSD could break above that barrier and test $0.100.

On the other hand, the momentum will shift to the downside if the price goes below $0.970. With the sellers in control, the coin is likely to find the first support at $0.965. Also, a break below that level will invalidate the upside thesis. Meanwhile, the resulting momentum could extend losses and test $0.960.