On March 25, Cardano (ADA) shares rose slightly, heading for a large share of losses in the first two months of this year.
Cardano: Are you still not optimistic?
The price of the ADA jumped by about 7.5% in trading on March 25, registering $ 1.19 for the month after reaching a low of $ 0.75. The massive recovery of the Cardano token yielded 60% profit. However, it still risks losing bullish momentum in the coming weeks.
At the heart of this bearish analogy is a multi-month downturn pattern with a track record of simultaneous contact and limiting ADA rebound attempts since September 2021.
In particular, the upper trend line of the channel was an ideal sales area, which is now being tested again as resistance, as shown in the diagram below.
ADA / USD daily price chart. Source: Trading View
The daily ADA RSI, now at 71.80, also warns of overbought territory. In an ideal scenario, an RSI reading above 70 could trigger sales in an attempt to offset the overvaluation of the underlying asset. This reveals the Cardano symbol for the inevitable risk of a retreat to the lower trend line of the descending channel.
Additional signs of a possible withdrawal of ADA appear on the weekly charts. In particular, the Cardano token’s setback tested 20-week (around $ 1.21) and 50-week (around $ 1.31) exponential moving averages (EMA) as resistance. They were instrumental in determining ADA’s revenues in January 2022.
ADA / USD weekly price chart. Source: Trading View
Alex Benfield, an analyst at Weiss Ratings, said the ADA needs to return $ 1.20 in support, a level that has maintained a bullish slope several times in 2021. He noted that if the Cardano token succeeds, we will likely see a midway rally. , add:
“Until this resistance is removed, this move risks losing momentum.”
ADA “basically bullish”
Alexander Mamasedikov, co-founder of the crypto wallet service MinePlex, believes that Cardano’s temporary prospects are optimistic despite the risk of overbought.
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The CEO believes that ADA’s continued bullish momentum is more fundamental than technical, and notes that the token began to increase after becoming an asset in Grayscale Investment’s new altcoin fund called Smart Contract Platform ex Ethereum Fund (GSCPxE).