Cardano Sets itself up for upward reversal despite altcoin market crash

TL;DR Breakdown

• Cardano price falls below 20-day EMA ($1.71) after an imminent recovery to $1.90
• RSI heads to the overbought region, indicating some bullish optimism
• What’s next with ADA price ahead of ERC-20 token converter launch

Cardano (ADA) bears aggressively sank the altcoin price below support at $1.48, approaching the beginning of the weekend. The bulls had just recovered above the 20-day Exponential moving average ($1.71)  before facing the imminent drop. A price rebound above the $1.48 support would help steer the price upwards to $1.94 by the end of the weekend. However, there are no signs of retreating bears who are persistent in bringing the price down. In fact, the RSI and the 20-day EMA are closing to the mid-point indicating a balance between demand and supply. 

This indicator would be in favor of the bulls in case of a slight tilt that would cause the price action to drop below the 50-day simple moving average ($1.44). Such a move might result on May 19th’s bearish reversal to $0.95 or open doors for a slight drop to $1. ADA bulls are betting on purchase-the-dip investors who could drive the price above $1.94 and test an all-time high above $2.34. 

Cardano price movement in the last 24-hours

The relative strength index (RSI) on the daily chart seems to be heading towards the overbought region. This could be a result of increasing dip-buyers. This technical is not suitable for the bears, but that’s in the short term.  Another bullish indicator observable on the daily chart is the Moving Average Convergence Divergence (MACD) that’s already crossing the signal line from underneath. Hence representing a buy action for the bulls. 

(Source: Tradeview)

The intraday trading range is a  $1.3661 low to a $1.584 high. Plus a negative 8.04% change in the last 24 hours. At the time of writing, Cardano (ADA) is trading at $1.4220. 

Cardano price started the day well with a short rally that saw it beat resistance at $1.50 and touch the $1.58 price level. Before starting a downward reversal that bottomed at a low of $1.36. This adverse price action could neutralize the bull’s strength if they try to push the price back to the 20-day EMA ($1.71). While such a move could signify strong dip purchases, the bears will inevitably be in control for the better part of the weekend. 

(Source: Tradeview)

Cardano 4-hour price chart

Presently, Cardano’s price is resting around $1.42, and any movement might be dependant on how much buying interest the coin attracts in the short term.  The coin might take on the next support level at $2 if more buyers step into the scene. If this doesn’t happen and the coin follows in sync with Bitcoin’s market, which has already hit $36K, the bears could persist, and the coin might head further downwards. 

(Source: Tradeview)

Conclusion

Cardano is attempting to reverse losses incurred under the currently declining crypto market. IOHK, the development team behind most of Cardano’s features, announced a token converter for transferring ERC-20 tokens to the Cardano blockchain. Users can implement the tokens as ADA, a move that’s likely to boost the network’s potential and further drive the price of ADA.

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