Cardano (ADA) Trades Sideways After Losing Major Support, Will The Current Support Hold?

Cardano has depreciated on its chart considerably over the past few days taking away most of the weekly gains. Over the last 24 hours, ADA lost 2% of its value dragging price down to $0.42 on the four hour chart. ADA lost critical support of $0.44 which it tried to defend multiple times.

After sloping downwards, now the coin has been trading laterally. The next major support level for ADA lies beneath the $0.40 mark. Technical outlook reflected bearishness on the chart. If ADA continues to display mundane price movement then it is only a matter of time till it loses its current support line.

Buying strength fell significantly as buyers have lost confidence. Continuation of the present price trajectory will favour the sellers. The existing price range could prove as a buy opportunity. If buyers act on it, Cardano might witness relief on its chart.

Cardano Price Analysis: Four Hour Chart Cardano was priced at $0.41 on the four hour chart | Source: ADAUSD on TradingView

ADA’s price traded sideways after it lost its crucial support of $0.44. At the moment, the coin has managed to flip its support level and transformed it into the resistance level. Overhead price ceiling stood at $0.44. With help of buyers the coin can attempt to revisit its aforementioned price level.

If buyers do not come to rescue then Cardano is set to lose another 9% of its value. Critical support for the coin was at $0.38. Trading volume seemed to have risen today indicating that sellers have dominated the price action. The red trading bar signified the same on the four hour chart.

Technical Analysis Cardano registered fall in buying strength on the four hour chart | Source: ADAUSD on TradingView

ADA displayed a fall in buying pressure after the coin lost crucial support. As sellers continue to dominate the market, the Relative Strength Index displayed the same reading. RSI was seen below the half-line after trying to slowly rise on the chart.

Fresh sell-off displayed a downtick on the RSI. The price of Cardano was below the 20-SMA which meant that selling momentum was strong. This reading indicated that sellers were driving the price momentum at the moment.

Related Reading | Litecoin Rejected At $55, Bears Might Drag LTC Below Immediate Support Line

Cardano flashed buy signal on the four hour chart | Source: ADAUSD on TradingView

ADA in accordance with the other indicators displayed negative price direction on the chart. The Directional Movement Index determines the price trend. DMI displayed negative price trend as the -DI (Orange) line was above the +DI (Blue) line.

The Average Directional Index (Red) was below the 40-mark and this determines strength in the current price trend. Continued movement downwards will drag Cardano to $0.40 and then to $0.38. Moving Average Convergence Divergence depicts price momentum and reversals of trends. MACD portrayed green signal bars which signified a buy signal for the coin.

Related Reading | Cardano (ADA) Price Remains Low Despite Buzz Around Vasil Hard Fork

Featured image from UnSplash , charts from TradingView.com