Cardano (ADA) has recorded an increase of over 12% in the last 7 days, currently trading above the $0.7 mark for the first time since the end of March. Along with the price increase, trading volume has also surged, increasing by 33% in just the last 24 hours, reaching $723 million.
However, despite this impressive recovery trend, some technical indicators are showing that ADA's bullish momentum is weakening and approaching significant resistance zones. Below is a more detailed look at Cardano's current setup as the market enters a new trading week.
The BBTrend of ADA is weakening after a series of positive growth.
Cardano's BBTrend indicator is currently at 7.55, significantly down from the peak of 13.27 just 3 days ago. The strong decline of this indicator clearly reflects the weakening strength of the recent price expansion – despite ADA still recording four consecutive sessions of closing in the green.
The BBTrend moving down indicates that although ADA's price has risen to higher levels, the underlying momentum behind this increase is gradually weakening. This raises concerns that if new buying pressure does not emerge, ADA may struggle to maintain its current upward momentum and face the risk of correction.
BBTrend (Bollinger Band Trend) is an indicator that measures the strength of price trends based on the degree of expansion or contraction of the Bollinger Bands. When BBTrend rises, it typically reflects strong momentum and increasing market volatility. Conversely, a declining BBTrend signals that the trend is weakening or that the market may enter a phase of accumulation or consolidation.
Currently, ADA's BBTrend is at 7.55, still indicating the presence of bullish momentum, but much weaker than the peak earlier in the week. This signal suggests that the push behind the recent increase is clearly declining.
If this indicator continues to decline, ADA may enter a sideways or short-term corrective state. However, if demand returns soon, especially from institutional investors or new capital flows, this token still has the potential to extend its series of positive price increases in the short term.
ADA faces hesitation as buyers and sellers vie for control.
Cardano's Directional Movement Index (DMI) is currently signaling a distinct weakening market trend. Specifically, the average directional index (ADX) – a measure of trend strength – has dropped sharply to 17.14, down from 31 just two days ago. This declining trend indicates that ADA's recent increase is losing traction.
Meanwhile, the positive directional indicator (+DI) is at 19.95 – slightly up from 15.96 a few hours ago, but still significantly lower than the 26 recorded two days ago, indicating that buying pressure is recovering slightly but is still not strong enough to re-establish dominance.
Conversely, the negative directional indicator (-DI) is at 19.07 – slightly down from 21.16 previously, but still higher than the 14.49 recorded two days ago. This change indicates that selling pressure is still present and the market is in a state of struggle between buyers and sellers.
Overall, signals from the DMI indicate that ADA is losing its clear trend, and if there is no breakout from demand, it is likely that the price will continue to fluctuate within a consolidation range in the short term.
The ADX (Average Directional Index) is used to measure the strength of a trend but does not reflect the direction of that trend. Typically, values above 25 indicate a strong trend is forming, while levels below 20 reflect a weak market or one that is consolidating.
With ADA's current ADX at only 17.14, the signal indicates that market momentum is quite weak. Both buyers and sellers have not gained a clear advantage amidst the overall trend lacking momentum.
Additionally, the gap between the two indicators +DI and -DI is narrowing, indicating a struggle between buying and selling forces. This further reinforces the likelihood that Cardano may enter a sideways phase, unless either the bulls or bears soon create a distinct breakout to regain market control.
Cardano's bullish structure faces an important test near $0.69.
Cardano's exponential moving averages (EMA) continue to show an upward trend, with short-term EMAs above long-term EMAs – a structure that often reflects market optimism.
However, recent price action indicates that caution is increasing. ADA has repeatedly tested the support zone at $0.69 and is currently trading very close to this threshold. The continuous return to test support despite the overall positive trend is a sign that the upward momentum is weakening.
The $0.69 zone is thus becoming a decisive support threshold. If buying pressure is not strong enough to maintain the price above this level, ADA may enter a period of correction or consolidate in the short term. Conversely, a strong upward reaction from this zone could set the stage for the next recovery.
If Cardano fails to hold the important support level at $0.69, the correction could extend with subsequent targets of $0.63, $0.609, and further down to $0.59 – particularly if selling pressure continues to increase in the coming sessions.
Conversely, if buying pressure returns strong enough to reverse the short-term trend, ADA could recover and move towards retesting the nearest resistance zone at $0.746. A decisive breakout above this level would signal confirmation for a clearer bullish scenario, with potential targets towards $0.77. In that case, ADA could re-establish a strong upward trend, especially if momentum is supported by high trading volume and a more positive market sentiment.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct thorough research before making decisions. We are not responsible for your investment decisions.
