Fears of a prolonged bear run continue as Cardano (ADA) has dropped below critical support level $0.3389. This is a great defensive point for ADA and has long held this level to strong sellers.
Investors who traded on ADA are left wondering whether a dip like this could signal a more continuous downturn. ADA has been battling to stay above the 100 day Simple Moving Average (SMA), a key indicator linked to downward momentum, on its 4 hour chart.
This should position sellers to currently be in control with $0.2388 being the next key support level. On the 4-hour, also ADA’s Composite Trend Oscillator suggests stronger selling pressure, as the SMA and signal lines are still below zero and heading towards oversold conditions, a common signal of strong bearish momentum.
ADA Under Increased Bearish Pressure
From the daily chart, we see that ADA is showing more down pressure now. A falling series of bearish candlesticks below $0.3389 is now making a bearish case that sellers are now dictating the market the price will fall in short term.
This was further reinforced by the 1day Composite Trend Oscillator which cycles downward, as an SMA is not able to be broken above; the signal line now descends into the oversold zone and will test the SMA once again, but likely without enough momentum to recover.
These signals have led investors to carefully watch the $0.2388 support level to ensure any more falls can be prevented. If and only if ADA is held above this level, then it might open up into a recovery attempt, with the aim of reclaiming the $0.3389 level. But a break below $0.2388 puts risk of a more bearish trend in action, along with the possibility of further price declines and enhanced selling pressure.
So far, Cardano has been evolving through this tough terrain, keeping itself in a position above critical support levels in order to fight off a protracted downtrend. In the coming days, investors should however keep an eye on Cardano as more falls might portray another bearish phase in place.
