- Cardano has registered a 7% drop today as the market’s downward momentum continues.
- The downswing pushed ADA below the vital $ 0.50 support level.
- Further selling pressure could result in a correction to $ 0.34.
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Cardano kicked off Thursday in bearish mode after dipping below a vital support level. The lack of trading volumes in the cryptocurrency market suggests that further losses can be expected.
Cardano Prepares to Dip Lower:
Cardano looks like it’s crumbling under pressure after breaching a crucial area of support.
The eighth-largest cryptocurrency by market cap has suffered a 7% drop over the past eight hours. The sudden downswing pushed ADA below the vital $ 0.50 support level and generated over $ 1.40 million worth of liquidations across crypto derivatives exchanges. Further selling pressure around the current price levels could increase the chances of a steeper correction.
Cardano appears to be breaking out of a symmetrical triangle that developed on its four-hour chart. The height of the pattern’s Y-axis suggests that ADA entered a 33.5% downtrend when it dropped below the $ 0.50 support level. A four-hour candlestick close below the 50% Fibonacci retracement level at roughly $ 0.48 will likely confirm the pessimistic outlook.
In this eventuality, Cardano could continue to trend down toward $ 0.34 or even $ 0.32. It is worth noting that ADA’s May 12 swing low at $ 0.38 could serve as potential support as it descends.
The odds will likely continue to favor the bears as long as ADA remains trading below $ 0.55. However, a sustained four-hour candlestick close above this resistance barrier could invalidate the pessimistic outlook. Slicing through this supply wall could accelerate the number of buy orders behind Cardano, pushing prices toward $ 0.61.
Fear, uncertainty, and doubt have taken over the cryptocurrency market in recent weeks, with the Fear and Greed Index revealing high levels of pessimism among market participants. Moreover, on-chain and technical indicators suggest that the prevailing negative sentiment has not yet taken its full toll on Bitcoin, indicating that a market bottom is not yet in sight. Although investing when sentiment is low has historically served cryptocurrency investors well, the current conditions appear ripe for a steeper downturn.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
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