Amid the altcoin crash, the price of Cardano (ADA) has been a hot topic of discussion among investors and traders. The digital asset has seen significant volatility and market participants eagerly await signs of a recovery rally. The recent market trends have caused the price of Cardano to go on a downward trajectory. However, before a recovery rally happens, there is a crucial level of support that ADA needs to touch.
Cardano suffers after failing to generate bullish confidence
On June 19, the price of Cardano (ADA) fell more than 3%. This drop pushed the ADA price to the daily lows of $0.257, a figure that caught the attention of traders and investors. This drop was not an isolated incident, but a response to Cardano’s inclusion in a list of digital assets that the US SEC categorizes as “unregistered securities”.
Last week, the Fed hinted at a likely 50 basis point hike in 2023, a development that tends to curb interest in riskier assets. Such increases often prompt investors to favor safer, less volatile investments, a trend that could have a significant impact on high-risk, high-reward altcoins like Cardano.
At the same time, the outstanding interest in ADA-linked derivatives has dropped significantly. It is down to about $111 million, the lowest level since January 2021. This decrease in outstanding interest indicates reduced trading activity or interest in ADA, which could affect liquidity and price volatility.
In the past 24 hours, the market has witnessed liquidations amounting to approximately $360,000. Long positions took the brunt of these losses, liquidating as much as $341K. This suggests that many traders who expected a price increase have instead decided to close their positions by selling ADA. This massive discharge from ADA likely contributed to the downward pressure on the price.
What to expect from ADA Price Next?
ADA’s weekly price chart indicates a 7% drop. But since the market’s downturn on June 10, sellers have lost momentum and are unable to push the price down any further. Given the strong support at 24 cents, bullish traders may have a window to send the price of ADA north.
After witnessing a sharp drop from $0.2682, the price of ADA gained support at $0.2571. Currently, bears are losing control of the price chart as bulls aim to push the ADA price above the EMA20 trendline.
At the time of writing, the ADA price is trading at $0.2624, down more than 1.9% in the past 24 hours. Analyzing the 4-hour price chart, the ADA price is currently trying to climb above the resistance line, and a push above $0.3312 will send the altcoin to a crucial level of $0.383.
On the bearish side, if the price of Cardano drops below $0.25, it could gain support near $0.22. However, an increase in this support is likely to occur as a result of the buy in the dip sentiment.