Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Cardano suffered enormous losses in recent days, but many major altcoins also saw large drops in prices.
- The price action did not indicate a higher timeframe reversal was likely in the coming days.
A recent report highlighted the bearish picture that Cardano [ADA] painted on its price charts. The fall below the $0.348 mark set the stage for bears to take control of the market on the higher timeframes.
How much are 1,10,100 ADAs worth today?
The SEC labeled Cardano as a security, leading to investors fleeing the markets. The Commission filed lawsuits against Coinbase and Binance, which added panic to the bleak market outlook in the crypto market in recent weeks.
The rising sell volumes support an extended southward move
Source: ADA/USDT on TradingView
The trading volume has been on the rise over the past week. Moreover, ADA began to fall in earnest. Even though its market structure flipped bearish on 8 May, the price was stuck within a range.
The bulls attempted to shift the trend in their favor in late May, forming a high at $0.386. But they could not follow up on this change in character in the market.
An analysis of the lower timeframes showed that this move upward was an isolated incident that did not have strong demand behind it, and the structure swiftly became bearish.
This materialized with an ADA move below the $0.3485 level, which represented May’s low. To the south, the next levels to watch out for are $0.298 and $0.239. The former resistance, at $0.27, could also act as the new resistance.
With the RSI showing strong bearish momentum and the OBV on the verge of falling below two-month support, the bulls were on their last legs. A second wind was unlikely, and further losses can be expected in the coming weeks.
The Open Interest indicated sizeable bearish pressure over the past four days
Source: Coinalyze
The chart from Coinalyze above is on the 1-hour timeframe. It showed that the spot CVD was in steady decline since 5 June. This was when ADA fell below the $0.375 level as well. Moreover, the Open Interest climbed alongside falling prices on 7 June.
Realistic or not, here’s ADA’s market cap in BTC’s terms
This was a sign that participants actively shorted the asset and denoted heavy bearish intent in the market.
At the time of writing, the bearish pressure was not as intense, but it was still dominant. Combined with the price charts, Cardano investors could wait for a move toward $0.27 or $0.24 before assessing whether a buying opportunity was present.
