Cardano: Regardless of Asking for $0.4, This is Why ADA’s Restoration Path Seems to be Darkish

Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.

There have been positive developments behind Cardano in recent days. The Cardano community had voted for the seventh fund of the Catalyst project in March and will soon vote for the eighth fund. This venture will be used to grow the Cardano ecosystem, with a particular focus on the NFT arena.

Another piece of good news is that in April, the number of addresses holding ADA hit an all-time high of 5.2 million. Still, accusations have been leveled against Cardano for being a “ghost chain”.

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Also on the charts, ADA fared poorly as November’s downtrend continued to persist.

ADA – 1 Day Chart

Source: ADA/USDT on TradingView

The declining wedge pattern appeared to see a break in mid-March, but this rally was unable to clear a key level at $1.26. Sellers were emboldened by this development and have been relentless ever since, and managed to drive ADA up to $0.4.

At the time of writing, the entire crypto market has seen a relief rally and ADA was one of the coins that showed double-digit percentage gains over a 24-hour period. However, the market trend and structure remains mostly bearish. The $0.8 to $0.9 could offer opportunities to sell or short.

Reasoning

ADA Finds Some Demand at the $0.4 Level, But Technicals Remain Firmly Bearish

Source: ADA/USDT on TradingView

The mid-March rally was the only time in 2022 that the RSI managed to stay above the neutral 50 line for more than a few days in a row. Otherwise, the RSI was under this mark to signify the presence of a downtrend. At the time of this writing, the RSI was recovering from a drop to 24.24.

The Stochastic RSI also formed a bullish cross into oversold territory, in response to the rebound from the $0.4 mark. However, the OBV had been in freefall for the past few days and was not yet showing signs of recovery.

Conclusion

Buyers beware, as the trend has favored sellers. Winter had arrived months ago, and there was still no sign of a thaw, let alone spring. The bearish pattern would be broken if ADA could break above the $0.9 mark, in which case the $0.6 and $0.78 levels could be retested as support.