Cardano Faces Selling Pressure, Hovers Above $0.36 Amidst Market Uncertainty

Cardano (ADA)
  • Cardano (ADA) is experiencing selling pressure and struggling to maintain its position above $0.36.
  • The altcoin market, including ADA, is vulnerable to downward movements if Bitcoin’s price drops.
  • Data shows significant movements of ADA tokens between addresses, indicating increased selling activity and market uncertainty.

Cardano (ADA), a prominent cryptocurrency, finds itself in a precarious position just above the $0.36 mark on the price charts. Recent weeks have witnessed selling pressure, prompting caution among investors and traders in South Africa. As Bitcoin’s dominance in the market has increased, altcoins, including ADA, have experienced significant losses, emphasizing the need for vigilance among ADA investors. Resistance near $0.38 has posed a challenge for ADA bulls, and a bearish market structure has emerged on the daily timeframe after prices fell below the $0.38 level in early May.

Analyzing the Relative Strength Index (RSI), it currently hovers around the neutral 50 mark, indicating a lack of strong downtrend momentum in May. While the higher timeframe trend remains bullish, it is crucial for bulls to exercise caution until the resistance zone between $0.38 and $0.4 is breached. The consolidation above $0.36 could be indicative of a higher timeframe uptrend, following previous rallies in January and March, which were followed by pullbacks. However, breaking through the resistance zone is essential for sustained upward momentum.

In the event of an uptrend, ADA bulls can target profit levels at $0.48 and $0.56. However, the overall trend of Bitcoin will have a significant impact on ADA’s price movement and market sentiment.

Data from Santiment reveals substantial movements of ADA tokens between addresses in April and May, with a peak on May 19 indicating a six-month high of 720 million tokens transferred. Such spikes often coincide with intensified selling activity, adding to the selling pressure experienced by ADA.

The retracement in mid-April coincided with a surge in dormant circulation, while the ones observed in early March were closer to the local bottom for Cardano on higher timeframes. The implications for Cardano remain unclear, as the coin’s mean age saw a sharp increase earlier this month but subsequently stalled just two weeks later. This indicates a phase of accumulation in early May, followed by a period where neither buyers nor sellers had a clear advantage. The MVRV ratio suggests that ADA is undervalued, with holders currently at a loss.

As Cardano teeters just above the $0.36 mark, investors and traders in South Africa will closely monitor market developments, particularly the movement of Bitcoin and its impact on ADA’s price trajectory. The ongoing selling pressure and accumulation patterns will provide critical insights into the future direction of Cardano in the dynamic cryptocurrency landscape.

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