Cardano [ADA] experienced a 5% decline in the last 24 hours, but managed to surge by 20% in the past week and almost 30% in a month. Despite the recent setback, the overall trend seemed to be in favor of the bulls.
The recent selling pressure was not significant. Open Interest dropped by 6.5%, and the spot CVD showed a slight decline. These indicators suggested a minor reset in market sentiment and a continued bullish outlook.
Analysis of the price structure and magnetic zones provided insights into the potential future movements of Cardano.
The significance of Cardano’s rejection from $0.25
On the 1-day timeframe, the market structure remained bullish.
Since June, higher highs have been breached, and higher lows have been established. The latest higher low at $0.177 is a crucial level that the bulls need to defend to sustain the upward trend.
The $0.25 resistance zone served as a local high during the May sell-off and a supply zone that Cardano struggled with in April.
A price movement into this supply zone followed by an 18.6% correction within five days indicated a short-term parabolic move with significant profit-taking. While the bullish swing structure persists, short-term sentiment may be subdued.
The potential for an extended retracement phase
In August, a buildup of short liquidations from $0.18 to $0.22 was swiftly eradicated as Cardano prices surged to $0.25.
A strong upward move on significant volume followed by a quick pullback indicated a short squeeze. Profit-taking in the $0.23-$0.25 range intensified volatility.
The OBV approached mid-August lows, indicating significant selling pressure during the recent rejection. Momentum on the 4-hour timeframe was turning bearish, potentially leading to a deep retracement towards $0.19.
Bulls will seek increased buying pressure as ADA nears the $0.19-$0.20 demand zone.
If trading volumes remain flat and aggressive buying is subdued, there could be choppy, sideways price action around $0.20 as bulls and bears vie for market control.
Final Summary
- Cardano made a strong push towards $0.25 but struggled to maintain the rally.
- A short-term retracement phase may drive prices below $0.20 in the coming days.
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as:
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