Cardano has retested the long-term buying range of $1 mark 6th time this year. While such price action is common. The worrying factor is the inverse head and shoulder pattern being created on this cryptocurrency.
ADA has taken support but only after sustaining at the level close to breakdown, which can easily be a retracement caused by people closing the selling positions. Cardano has a narrow support and sustainable range. With technical analysis, one can identify the buying and selling zones on ADA.
Cardano Price Analysis
Hitting a high of $2.4 and retracing more than 60% of its gains in less than two months indicates the loss of buying interest. The price action of ADA looks more like a small profit booking pattern.
There is a strong weakness in its price action, failure to break resistances one after the other and breaking important supports has created a narrow trading zone for investors. While there is some potential in the idea behind ADA, it cannot outperform its siblings in the short term based on the technical negativity.
Buying action was initiated after staying close to the $1 valuation, unlike severe retracements we witnessed on May 19, 2021, and June 22, 2021. The breakdown started from the momentum Cardano failed to sustain its bullish buying sentiment across the $1.5 resistance.
After reaching the low of $1, ADA price bounced to new levels indicating a breakout. But this breakout needs to sustain to prevent a massive sell-off. Cardano has had an outstanding run this year and inability to sustain the breakout level and push Cardano to new lows, which can further add on selling pressure.
MACD indicates a hope of retracement, but the crossover line is on the negative quadrant, and hence it will be wiser to wait for the breakout zone to sustain. A day closing above $1.40 will indicate a positive buying sentiment. For now, the hopes of investors depend on the sustenance of this pullback as per ADA predictions. RSI indicates a breakout from oversold zones towards 40 and can further push ADA towards oversold zones.