Cardano Price Key Highlights
- Cardano (ADA) continues to trend lower but could be due for a bounce as it nears a major floor.
- Price is trading below a descending trend line and is on its way to test the support around 0.130.
- Technical indicators are giving mixed signals, with oscillators reflecting oversold conditions.
Cardano could be due for a bounce as it approaches a support zone visible on the daily time frame.
Technical Indicators Signals
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. This means that the downtrend is more likely to continue than to reverse.
The 100 SMA lines up with the short-term descending trend line to add to its strength as resistance. The gap between the moving averages is widening to reflect stronger selling pressure.
However, RSI is pulling up from oversold conditions to show that buyers are ready to take control from sellers. A bit of bullish divergence can also be seen as the oscillator made higher lows while price had lower lows.
Stochastic has also reached oversold levels to show exhaustion among sellers but has yet to turn higher to signal a return in buying momentum.
ADAUSD Chart from TradingView
Market Factors
Cryptocurrencies have been in the red for the past few days as the lack of positive industry updates has been a drag. This is at the same time as regulatory concerns returned, along with a pickup in risk aversion in the global financial markets.
The political situation in Europe is being blamed for the drop in risk appetite as elections in Spain and Italy could bring more uncertainty, driving traders to safe-havens like the dollar.
The US currency is currently supported by Fed tightening expectations but these could be affected by the NFP release on Friday. Analysts expect a stronger pace of hiring for May but of particular interest would be data on wage growth.
Note, however, that the first smart contract for Cardano is already live.