Analyst Namrata Shukla gave her point of view on Cardano (ADA) price
Cardano has received a good boost from its technology updates: the platform will add smart contracting capabilities to the blockchain. The ADA has reaped the benefits of these developments by peaking at $2.51 in May. However, this rally was short-lived as the correction was established across the cryptocurrency market. The ADA was trading 35% below its $2.50 peak.
Cardano hourly chart
Source: ADA/USD on TradingView
The downward volatility that hit Bitcoin first caused the remaining alts to lose value as well. The ADA’s short-term image also appeared increasingly bearish and highly volatile.
Although the ADA tried to overcome several resistance levels from its low point, selling pressure took over and pushed the value back down. This has happened twice now and with each push back, the price has settled to a level higher than the price where the recovery started. This can be visible on the chart.
Could this mean that another fix is to come?
Fibonacci retracement levels marked important resistances for the ADA’s return journey. Its value rose to $1.59 when a sudden drop caused the price to drop to $1.49. This was the 23.60% Fib level and was supported by traders. The second time the price tested resistance, it failed but curiously settled at 38.20% of the Fibonacci index. This observed a general upward trend in the ADA value with constant correction.
This price pattern suggested that the ADA was currently witnessing a correction phase. As the price was still showing downward pressure, it could potentially fall to support at $1.49. The RSI suggested that buying pressure was on the upside, while the Aroon indicator was also suggesting a reduction in bearish strength in the market.
If the ADA follows its existing pricing pattern, it may soon witness another correction. With selling pressure remaining minimal, the ADA may be moving to retest resistance. If the asset does not exceed this level, the price may fall again. However, breaking resistance can bring a trend reversal in the ADA market.