Cardano falls beneath month-long range, can another 10% tumble follow

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

Car­dano [ADA] has shed a whop­ping 85% in val­ue over the past 11 months. In August 2021, the coin touched a high-water mark of $3. Once the $2.5 and $2 lev­els were flipped from sup­port to resis­tance, the trend shift­ed quickly.

Car­dano was already in a down­trend when the rest of the cryp­to mar­ket began to reach its peaks in Novem­ber. The tum­ble of oth­er tokens only accel­er­at­ed the fall of Car­dano on the price charts.

The past two months have seen a range estab­lished for ADA, but the price has fall­en beneath the range lows over the past cou­ple of days of trad­ing. Now, the ques­tion is- Should Car­dano buy­ers be wary of yet anoth­er wave of selling?

ADA- 1‑Day Chart

Source: ADA/USDT on TradingView

In white, a range from $0.64 to $0.44 was high­light­ed for ADA. The psy­cho­log­i­cal $0.5 lev­el has also act­ed as sup­port and resis­tance. In fact, the $0.48-$0.51 area was a hot­ly con­test­ed region on the price chart.

The long-term trend was bear­ish, but the past two months have seen a range devel­op. If ADA closed a trad­ing ses­sion below the $0.4 mark, anoth­er leg down­ward would become far more likely.

ADA- 4‑Hour Chart

Source: ADA/USDT on TradingView

The four-hour chart showed an asset in decline. ADA set a series of low­er highs in the past four weeks. More­over, the $0.44 demand zone has also been ced­ed to the bears. It was test­ed as resis­tance the pre­vi­ous day as well before ADA began to decline once more.

A set of Fibonac­ci retrace­ment lev­els (yel­low) were plot­ted based on the move from $0.49 to $0.4 last week. The 38.2% retrace­ment lev­el stood res­olute upon a retest from the south. It also has con­flu­ence with the range lows (white), which demar­cat­ed the $0.44 region as an intense area of selling.

Source: ADA/USDT on TradingView

The Rel­a­tive Strength Index (RSI) slipped back beneath the neu­tral 50 line. It climbed to 47 but faced rejec­tion, which strength­ened the idea of bear­ish momen­tum behind Car­dano on the charts.

Fur­ther­more, the On-Bal­ance-Vol­ume (OBV) has been in decline in recent weeks as well. This showed strong sell­ing vol­ume and a lack of buy­ers beneath the $0.5 level.

The Chaikin Mon­ey Flow (CMF) has also been below ‑0.05 for a good chunk of the past month. Once more, a sig­nif­i­cant cap­i­tal flow out of the Car­dano mar­ket was signaled.

Conclusion

The indi­ca­tors showed bear­ish momen­tum and high sell­ing pres­sure. The mar­ket struc­ture was also bear­ish on low­er time­frames. The ral­ly from $0.43 in late June was unable to advance past $0.48, and the past week saw all those gains wiped out.

To the south, $0.4 and $0.38 are like­ly to serve as sup­port lev­els. A long-term hor­i­zon­tal lev­el of sig­nif­i­cance was present at $0.27 as well.