Cardano's price encounters significant resistance around $0.70 amidst a bearish trend. Will the bulls drive ADA to $1, or is a decline to $0.55 forthcoming? Currently,
Cardano is trading at $0.6797 as the cryptocurrency market experiences a bearish Sunday. Over the weekend, the price of ADA fell by 3.34%, dropping from $0.69 to a closing value of $0.6764.
Despite this decline, Cardano remains above a vital dynamic support level, which serves as its last line of defense.
Importantly, the token is at a pivotal juncture, as evidenced by the increased bullish activity among ADA derivative traders, indicating a rise in underlying confidence. Will this growing optimism propel the ADA price to $1, or is a retreat to $0.55 unavoidable?
Cardano Price Holds Key 50D SMA Support Amid Market Downturn
The price of Cardano is oscillating between the descending 100 and 50-day simple moving average lines.
Currently, within this downward trend, the ADA price is approaching the lower limit, indicating a possible breakdown.
The recent rejection of lower prices, coupled with an intraday recovery of 0.50%, suggests a potential bullish reversal.
Over the last week, the price of $ADA ADA has declined by nearly 4%, failing to maintain levels above the $0.70 mark.
Additionally, heightened selling activity near the 23.60% Fibonacci level at $0.76 indicates a significant bearish pressure from the overhead supply zone.
This selling intensity has led to a convergence of the MACD and signal lines. Currently, both average lines are nearing 0.00811, which may signal an impending bearish crossover, potentially triggering a sell signal and increasing the likelihood of a breakdown.
Should the price fall below the psychological support level of $0.60, the breakdown rally could revisit the previous swing low of $0.5528.
Conversely, if the broader market rebounds and bullish sentiment for Cardano persists, the uptrend may exceed the critical overhead resistance at $0.7673, enhancing the chances of Cardano reaching $1, which corresponds to the 50% trend-based Fibonacci level.
Therefore, for traders anticipating a bullish movement towards $1, the breakout at $0.7673 will serve as the initial catalyst.
Massive Surge in Long Positions Teases Bullish Reversal
Notwithstanding the recent decline over the weekend, optimism regarding the Cardano price is increasing within the derivatives market.
According to data from Coinglass, the ADA Long/Short Ratio Chart indicates a significant rise in long positions.
In the last four hours, there has been a notable increase in long positions, which now constitute 70% of all open positions, resulting in a long-to-short ratio of 2.40.
This indicates a significant level of bullish sentiment regarding the Cardano price, even in light of the recent pullback.
Additionally, the liquidation map for the $ADA -USDT trading pair on Binance suggests that substantial liquidations could occur if the upward trend persists.
According to the data, an ascent to $0.70, approaching the critical overhead supply zone, could lead to a total short liquidation amounting to $4.44 million.
This will involve $169,000 utilizing 25x leverage and $779,000 employing 50x leverage. Conversely, a possible decline to $0.66 could trigger over $2.33 million in long liquidations.
AI Testnet Hype Fails to Sustain Rally
During the weekend, the price of Cardano briefly hit the $0.70 mark following Charles Hoskinson's announcement regarding AI-driven network testing.
This announcement introduced an AI-enhanced test network for Cardano's Leios protocol, which is expected to significantly boost transaction throughput.
Additionally, it aims to equip the network for post-quantum cryptographic standards and tackle scalability challenges.
Nevertheless, the news did not lead to a prolonged increase in ADA prices. Nonetheless, this innovation enhances Cardano's long-term prospects as a blockchain prepared for the future.
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