Cardano (ADA) Faces New Downtrend: Key Drivers Behind The Downtrend

Cardano price failed to cross $0.40 and started another decline. ADA is now trading below $0.3850 and may extend losses in the near term.

• ADA price started to decline again and traded below $0.3880.
• The price is trading below $0.3850 and the 100-hour simple moving average.
• There was a break below the main bullish trend line with support at $0.3845 on the hourly chart of the ADA/USD pair (data source from Kraken).
• The pair can extend losses and test the $0.370 support area.

Cardano Price Dips Again

A few days ago, Cardano tried a wave of recovery above the $0.3650 area like Bitcoin and Ethereum. However, ADA failed to clear the $0.40 resistance area. A high was formed at $0.3967 and the price started a new low.

There was a move below the $0.3880 and $0.3865 support levels. The price dropped below the 23.6% Fib retracement level of the upward move from the $0.3620 swing low to the $0.3967 high. Besides, there was a break below a key bullish trend line with support at $0.3845 on the hourly chart of the ADA/USD pair.

ADA price is now trading below $0.3850 and the 100-hour simple moving average. If there is further upside, the price may face resistance near the $0.3850 area.

Initial resistance is near $0.3880. The next key resistance would be $0.40. If there is a close above the resistance of $0.40, the price can start a strong rally. In the mentioned scenario, the price could rise to the $0.4150 region. Any further gains would require a move to $0.4250.

More downsides to the ADA?

If the price of Cardano fails to rise above the $0.3850 resistance level, it may continue to decline. Immediate support on the downside is near the $0.3795 level or the 50% Fib retracement level of the upside from the $0.3620 swing low to the $0.3967 high.

The next major support is near the $0.370 level. A break below the $0.370 level could open the doors to a test of $0.350. The next major support is near the $0.3350 level.

Technical References

Hourly MACD – The MACD of ADA/USD is gaining momentum in bearish territory.

Hourly RSI (Relative Strength Index) – The RSI for ADA/USD is now below the 50 level.

Major Support Levels – $0.3790, $0.370, and $0.350.

Major Resistance Levels – $0.3880 and $0.400.