As of this writing, ADA/USD is trading slightly above the 97 cents and its fall over this weekend broke below important support barriers. Cardano is now testing values not seen in one calendar year, meaning it is within a range that is challenging levels not seen since February 2021 when ADA/USD like the broad cryptocurrency market was starting to ‘catch fire’ and reached highs in mid-May of 2021.
Unfortunately for ADA/USD, it is not within a bullish trend, it is within a severe bearish mode. Cardano’s current price levels are far below the apex highs ADA/USD achieved in early September of 2021 when it traded near 3.11100000. ADA/USD was able to build off lows seen in January when it spiked lower in correlation with the broad digital asset market and sunk to a low above 93 cents, but this past weekend’s depth actually penetrated those dangerous levels.
Yesterday’s trading dipped briefly below the 92 cents level. While bullish traders who have a speculative zeal may believe ADA/USD is vastly oversold at its present levels, technical perspective should also be considered, and the notion that Cardano did not suffer a significant spike lower in recent trading may be a large warning sign to remain cautious about any potential reversals higher. This is because the selling displayed in ADA/USD the past week has occurred in a rather incremental motion.
Traders who want to continue to pursue the downside price action of ADA/USD cannot be faulted logically for wagering on short positions. If the current price level of ADA/USD falters and the 97 cents level fails to hold short term, and the 96 cents mark is proven vulnerable, another retest of yesterday’s lows could develop. While some analysts are pointing to a correlation between cryptocurrency values and technology equities which are struggling on the NASDAQ, this in fact cannot be proven. The broad cryptocurrency market continues to be hit by nervous selling.
Traders should be extra conservative under present market conditions. ADA/USD is testing lows not seen in one year. If lower values of Cardano are displayed near term, this could set off another massive wave of volatility. Speculators need to have strong risk management in place. Seeking short-term reversals may feel appealing for bullish traders, but they should likely look for quick hitting trades that are not overly ambitious as long term technical lows continue to be flirted with by speculators.
Cardano Short-Term Outlook
Current Resistance: 1.00250000
Current Support: 0.94850000
High Target: 1.04200000
Low Target: 0.88550000
