Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Cardano displayed a bearish market structure on the daily time frame.
- Despite the losses since mid-April, the bigger picture suggested ADA could move to $0.5 later this year.
Bitcoins [BTC] dominance slowly increased over the past two months, from 46.7% at the beginning of April to 48.01% at the time of writing. Yet the price of the king coin has since fallen by 3.3%. This suggested that the altcoin market has experienced bigger losses than BTC.
Realistic or not, here is the market cap of ADA in terms of BTC
Therefore, altcoin investors could lose heavily in the event of another Bitcoin downside move. This threat is something that Cardano [ADA] investors must acknowledge. On the price charts, ADA bulls faced resistance near $0.38.
Cardano buyers are firmly holding on to the $0.36 support
Source: ADA/USDT on TradingView
In the past month, Cardano has traded within the $0.36 and $0.38 levels. On the daily time frame, Cardano witnessed a bearish market structure after the bears forced prices below $0.38 in early May.
The RSI was hovering around neutral 50 at the time of writing. It hasn’t spent much time below the 40 reading in May, showing that there was no strong downtrend in May, although momentum was in the sellers’ favor.
Along with the price action, the trend in the higher time frame was bullish. The rallies in January and March were followed by declines of 27% and 22% respectively. Therefore, the consolidation above $0.36 could be part of an uptrend in higher time frame. However, bulls should be cautious until the $0.38-$0.4 resistance zone is broken.
In case of an uptrend, bulls can target $0.48 and $0.56 to post profits. Bitcoin’s trend could have a major impact on ADA.
After a build-up phase in the first half of May, there was selling pressure
Source: Sanitation
Santiment’s data showed massive amounts of ADA tokens were moved between addresses in April and May. The peak on May 19 indicated 720 million transferred tokens, representing a six-month high. Large spikes in this metric generally coincide with a strong selloff.
How much are 1,10,100 ADAs worth today?
The mid-April retracement was accompanied by an increase in dormant circulation. However, those from early March were close to the local bottom for Cardano on the higher time frames. What case it would be for Cardano was unclear.
The average coin age experienced a steep rise earlier this month, but stopped just two weeks later. This showed accumulation in early May, followed by a phase where neither buyers nor sellers had clear superiority. The MVRV ratio suggested that ADA was undervalued and that holders had lost.
