- Cardano (ADA) trades within a three-month range, facing resistance at $0.366.
- Analysts note weak demand, raising concerns about potential price rejections near $0.375.
- A Bitcoin surge might influence Cardano’s break out.
Cardano (ADA) is navigating a tight trading range that has lasted three months. Recently, market analysts reported a five-month high in the NVT ratio, suggesting ADA might be overpriced. The struggle to break past resistance levels emphasizes the challenges buyers face, raising questions about the altcoin’s short-term path. However, bullish momentum seems to be building, as the post below suggests.
If you're a #cardano bull, then a daily close at or above $0.37 over the next few days would be bullish as fook for $ADA pic.twitter.com/Isx3aw2ZVk
— Jonathan Morgan (@jonmorgan_HODL) November 2, 2024
Cardano’s Range-bound Struggle
Since July, ADA has fluctuated between $0.393 and $0.311. The mid-range sits at $0.352, showing a pause after the downtrend that began in March. This consolidation hints at a shift. Buyers now have a chance to accumulate as selling pressure eases.
Fibonacci retracement levels show the 50% mark at $0.366 as a significant hurdle for bullish traders. This level consistently blocked attempts to rally in October. Increased selling pressure is evident, with the On-Balance Volume (OBV) slipping lower in recent weeks.
The Relative Strength Index (RSI) sits around the neutral 50 mark, indicating weak momentum. Investors find themselves in limbo, unsure about the market’s next move. A rejection at the 78.6% retracement level in September raised alarms, hinting at potential weakness in higher time frames.
Potential Bull Trap Ahead?
Analysts have pinpointed a crucial liquidity zone between $0.371 and $0.377. This area acts like a magnet, likely pulling prices toward it. However, buyer demand remains lackluster, suggesting a possible rejection from $0.375. This caution grows as current trading conditions could trap bullish investors.
A decisive move from Bitcoin (BTC) might spark Cardano’s escape from this stagnant range. Without that push, breaking above $0.40 seems unlikely. The resistance levels at $0.393 and $0.418 must shift to support before any substantial rally can happen.
Investors should remain vigilant. The combination of selling pressure and resistance levels creates a complex picture. Upcoming days will be critical in deciding whether ADA can retest three-month highs or continue its sideways drift. The potential for price movement exists, but caution should guide strategies as volatility looms.