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Cardano Faces Pressure Near 50-day SMA On Daily Chart; What to Do?

source-logo  thecryptobasic.com 23 May 2024 10:49, UTC

Cardano currently encounters resistance near the 50-day Simple Moving Average (SMA) on the daily chart, suggesting a potential decision point for traders.

Cardano (ADA) looked depressive on the daily chart for the third straight session on Wednesday. The bulls could not sustain the gains that gathered at the beginning of the week.

As it already trades in a short-term range of $0.42 to $0.52, the price behaves accordingly, facing pressure at the upper range. The bulls were unable to breach the mentioned level, indicating a lack of strength.

At the time of writing, ADA/USD changes hands at $0.48, up 0.21% for the day. The 24-hour volume dropped more than 24% to $374 million. An increase in the price with a drop in volume could suggest that the upswing is not sustainable.

Cardano 1D Chart

At present, the price displays a quiet movement with no clear directional bias. If ADA breaches above the 50-day SMA, the bulls could stretch their muscle towards $0.51, followed by the $0.56 high on February 13. This view is supported by the momentum oscillator, Relative Strength Index (RSI).

However, if the bearish sentiment kicks in amid a volatile market sentiment, then there is a probability of falling toward the lower levels. The immediate downside target could be found at the May 17 candle at $0.45.

The above-mentioned move will validate the movement of a range-bound market structure. Bears will further pull towards the key support zone of 0.42.

In a nutshell, Cardano (ADA) price trades at a crucial juncture, where there is a tug of war between bulls and bears. If the spot price convincingly trades below the 50-day SMA, then bears would have the upper hand.

Technical indicators

  • 50-day SMA holds at 0.48. The price holds below the moving average as of press time.
  • RSI (14) trades above 50, indicating a bullish bias.

Support and Resistance

Support 1: $0.46

Support 2: $0.42

Resistance 1: $0.50

Resistance 2: $0.52