Over the past 24 hours, Cardano's ADA token has seen a minor pullback of 1.7%, dropping in price from around $0.3155 to $0.307743. Despite this short term decline, ADA remains up an impressive 15.1% over the past 30 days, sparking a debate on whether this rally is sustainable.
Comparing ADA to Bitcoin's Bearish Divergence
Interestingly, ADA's recent price slide comes as Bitcoin is seeing bullish momentum, gaining 2% in the past day. This divergence where ADA is declining while BTC rallies suggests traders are shifting funds from altcoins into Bitcoin.
Additionally, ADA's price of $0.307 is down significantly from all time highs above $3. This contrasts with Bitcoin trading relatively close to its own ATH. This bearish setup for ADA compared to BTC could forecast further altcoin weakness ahead.
Analyzing the Crucial $0.30 Support/Resistance Level
The key price zone that traders are watching closely for ADA is the $0.30 level. This round number has acted as both support and resistance over the past few months.
Currently, ADA is battling to hold above $0.30 as support. A decisive breakdown could trigger a sharp move lower, while a bounce here would confirm the level as resistance flipped back to support.
If the bulls can maintain the price above $0.30, the next resistance zone to watch is $0.35-$0.36. A rally back to this range would signal the short term uptrend is still intact.
ADA Price Prediction - More Weakness Ahead?
Given the bearish divergence and inability to regain the $0.35 level so far, my bias is for more downside for ADA in the near term. The crucial support is the 200-week moving average, currently around $0.245.
I expect ADA will likely break below $0.30 support and test down towards the 200-week MA before any substantial bounce materializes. Rallies are likely to face resistance around $0.35, with more altcoin weakness against Bitcoin ahead.
However, the bullish longer term uptrend remains intact, with ADA likely to regain its footing above $0.30 support if the crypto market sentiment improves in the coming weeks.
Is Cardano a Good Buy at Current Levels?
Overall, I view the current $0.30 price zone as presenting an interesting risk/reward opportunity for longer-term ADA investors. However, proper risk management is vital, as a drop below $0.30 could trigger accelerated selling pressure.
Dollar cost averaging or waiting for a confirmed trend change would be lower risk strategies. The 200-week MA around $0.245 is the key line in the sand that bulls must defend to prevent a deeper bear market. If this level breaks, a more substantial capitulation and drawdown could occur before ADA reverses higher.
What Price Levels Are Most Important for ADA?
On the downside, the two key support zones to watch are the current $0.30 level, and the 200-week MA around $0.245.
On the upside, ADA must break and hold above the short term resistance at $0.35-$0.36 to confirm the near term downtrend is over. The major macro resistance level to watch is the all time high around $3.