Cardano rejected at $0.4200 – ADA bulls can seek re-entry at this point

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion

• ADA’s price action faced rejection at a key bearish order block. 
• Mixed signals in the futures market call for patience and caution. 

Cardano [ADA] has cleared all gains made in April, setting the asset into an unsettling start of Q2 2023. Notably, in the first half of April, ADA rallied from $0.3700 to $0.4614 – about a 25% hike. 

However, the gains were lost in the second half of April after ADA dropped and retested the bullish order block and support range of $0.3700 – $0.3800 (cyan). 

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Given the FOMC meeting on 2-3 May, the first week of May will expose ADA to some volatility. At press time, Bitcoin [BTC] consolidated below $30k, reiterating short-term bullish sentiment. 

ADA could sink lower if BTC’s bullish sentiment is dented slightly after the FOMC announcement.  On the contrary, ADA could surge if BTC reclaims the $30k zone after the meeting. 

Will the retracement extend?

Source: ADA/USDT on TradingView

On 14 April, ADA broke above the key February bearish order block (OB) of $0.4200 but faced rejection at the confluence area of $0.4614. The upswing saw ADA gain 9% over the Q1 2023 peak value. 

However, the drop and subsequent bearish breakout of the ascending channel (yellow) pushed ADA back to its early April range of $0.3700 – $0.4200. At press time, the asset retraced slightly after hitting the bearish OB of $0.4200 and could attract more sellers. 

As such, ADA could retest the range support and April demand zone of $0.3700 – $0.3800 (cyan). The retest could offer new buying opportunities, especially if ADA rallies back to $.4200 or above. However, the FVG (fair value gap) zone of $0.4251 – $0.4333 (white) could also slow any upswing beyond $0.4200. 

Conversely, ADA could depreciate to $0.3490 or lower if the support cracks, denting the bullish sentiment. 

Meanwhile, RSI oscillated near the neutral level since last Friday (28 April), showing indecision between buyers and sellers. But OBV and volume dipped since 27 April, showing buying pressure eased in the same period. 

Mixed signals in the futures market

Source: Coinglass

How much are 1,10,100 ADAs worth today?

According to Coinglass, liquidations on 29 April fluctuated between longs and shorts – suggesting a neutral sentiment in the futures market. 

But, there were more liquidations of short positions than long positions at press time. In addition, the exchange long/short ratio showed longs’ dominance stood at 53.95% on the 4-hour timeframe – a mild short-term bullish sentiment. 

Due to the mixed signals, investors should track BTC for more clarity besides exercising caution.  

Source: Coinglass