Two scenarios could play out for Cardano in the near term, as its price sits between a lower-timeframe support and resistance level.
Notably, how it reacts around the current level would determine its near-term price trajectory. Would we see a Cardano breakout to higher resistance levels or a breakdown to retest earlier price lows?
Key Points
- Two scenarios could play out for Cardano in the near term, as its price sits between a lower-timeframe support and resistance level.
- How ADA reacts around the current level would determine its near-term price trajectory.
- Currently priced at $0.260, the coin trades near a lower resistance between $0.261 and $0.262.
- Closing above $0.262 with conviction sets the cryptocurrency up for a retest of the $0.280 to $0.300 resistance area.
- Failure to break above the $0.262 resistance could see a retest of the $0.220 support.
- New capital inflows or demand are slowly creeping in as the market takes an accumulation disposition.
Cardano Near Resistance
One might wonder how this is possible, as ADA has been on a clear downward trend. However, it recently had a relief pump after visiting lows last seen in June 2023.
The coin dropped to $0.220 on February 6, mirroring a broader market sell-off. However, it quickly shrugged off the setback, rebounding by more than 12% from the low on the same day, confirming the strength of this support area.
ADA bounced to a high of $0.284 but could not sustainably trade above the resistance around that area. Currently priced at $0.260, the coin trades near a lower resistance between $0.261 and $0.262.
What Could Happen from Here?
Cardano remains weak, with its broader trend still bearish. However, a break above this resistance could fuel further upside moves in the near term. Closing above $0.262 with conviction sets the cryptocurrency up for a retest of the $0.280 to $0.300 resistance areas.
If ADA further breaches this support, then more uptrend possibilities remain. This would validate a shift in momentum, sparking a recovery push to much higher prices.
Meanwhile, downside pressure could ruin this recovery. If the broader crypto market fails to keep its cool and drops further, ADA could follow suit. Failure to break above the $0.262 resistance could see a retest of the $0.220 support. A breakdown there would be detrimental to sentiments around Cardano.
Fresh Firepower Signals Cardano Optimism
In a bear market like this, fresh firepower is necessary to fuel a price recovery, and Cardano is seeing some of it. New capital inflows or demand are slowly creeping in as the market takes an accumulation disposition.
CoinGlass data show that ADA spot holders are moving their funds off exchanges, which reduces selling pressure. In the past three days, spot inflows stand at $54.08 million, while outflows are $56.11 million.
Outflows surpassing inflows show that market users are preferring to move their ADA tokens off exchanges, signaling accumulation. With the long/short ratio by accounts on Binance and OKX surpassing 2.00, building long volume also indicates that more traders are betting on an upside move.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.