Cardano [ADA] had to pull back from the $0.416 mark it achieved on Friday, 27th September. Bitcoin [BTC] encountered strong resistance over the last four days. Amid unsettling events in the Middle East, concerns among investors grew, leading to increased selling pressure.
A previous analysis by CryptoCrypto suggested that the prevailing bearish sentiment could drive ADA well below the $0.39 support level. This prediction has materialized, with the token now back in the mid-range area.
Potential for Swinging Traders
Analysis by DMI indicates that the bullish trend has completely faded, as the ADX (yellow) dipped below 20 and the +DI (green) declined further. The OBV dropped to a level that had previously acted as support, showcasing the dominance of sellers.
The Cardano range (marked in purple) has retraced back to late July levels. Although there was a recent attempt to break out with significant volume and momentum, a rapid shift in sentiment once again put the bulls on the defensive.
Nevertheless, this retracement to the mid-range zone presents an opportunity for buyers. The target price is set at the high end of the range, around $0.392, with a suggested stop-loss just below $0.342, the lowest point reached on October 1st.
Possible Easing of Cardano Selling Pressure
Over the past couple of weeks, there has been a lull in market activity. This hiatus indicated to bullish investors that a wave of selling was not imminent.
Furthermore, the 30-day MVRV dropped into negative territory, signaling that the recent selling spree might be nearing its conclusion as the number of short-term profit holders reduced.
The recent test and response at the $0.352 support level are seen as positive. The average coin age has been gradually increasing since August, suggesting an accumulation phase for Cardano.
Disclaimer: The information provided is not intended as financial, investment, trading, or any other form of advice, and represents solely the author’s perspective.