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Analysis

ADA price may return to $1 as threats increase

February 7, 2022 - Around 2 mins mins to read

ADA price has broken out of a consolidation range but is struggling to move higher. The presence of a resistance confluence makes this run an arduous task for the bulls.

ADA is exiting the consolidation but things are getting worse

ADA has been trading between the $1.12 and $1 levels for about 2 weeks, which is signaling a consolidation. On February 5th, the price broke out of this range and created a swing high above $1.12, turning it into a support floor.

ADA faces two key hurdles trading above $1.12, the weekly resistance at $1.20 and the 50-day simple moving average (SMA) at $1.24. As a result, the chances of a price increase will be significantly lower.

So, at one of these levels, it is likely that the price will be rejected and slide lower. Failure to break the 50-day SMA at $1.24 will result in a 15% drop to the daily support at $1. It served as support for the mid-2021 bull run that pushed Cardano’s coin to $3. Therefore, this stable support floor is where the disadvantages can be limited.

ADA priceSource: TradingView

Supporting the downtrend is IntoTheBlock’s Global In/Out of the Money (GIOM) pattern. Notably, there is no immediate support for ADA and the existing stability level at $1.03, adding further credibility to the short-term bearish prediction. Therefore, investors can expect ADA to gain a foothold around this barrier, where approximately 448,830 addresses that bought 7.78 billion coins are now profitable (In the Money).

ADA price

 Source: IntoTheBlock

Another reason ADA is unlikely to show an upward trend is that the number of large transactions has dropped from 5,100 to 4,900. This 3.9% decline shows that investors are not interested in current levels.

ADA price

Source: Intotheblock

All in all, the price seems poised to drop quickly to $1 – an important psychological level. The bearish outlook may be reversed if the bulls close a four-hour candle above $1.24.

This gives ADA time to rally to $1.45 (up 17%). After that, upside potential is likely to be capped here as this is the confluence of weekly resistance and the 100-day SMA.

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

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Author

Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.
Analysis

ADA price may return to $1 as threats increase

ADA price has broken out of a consolidation range but is struggling to move higher. The presence of a resistance confluence makes this run an arduous task for the bulls.

ADA is exiting the consolidation but things are getting worse

ADA has been trading between the $1.12 and $1 levels for about 2 weeks, which is signaling a consolidation. On February 5th, the price broke out of this range and created a swing high above $1.12, turning it into a support floor.

ADA faces two key hurdles trading above $1.12, the weekly resistance at $1.20 and the 50-day simple moving average (SMA) at $1.24. As a result, the chances of a price increase will be significantly lower.

So, at one of these levels, it is likely that the price will be rejected and slide lower. Failure to break the 50-day SMA at $1.24 will result in a 15% drop to the daily support at $1. It served as support for the mid-2021 bull run that pushed Cardano’s coin to $3. Therefore, this stable support floor is where the disadvantages can be limited.

ADA priceSource: TradingView

Supporting the downtrend is IntoTheBlock’s Global In/Out of the Money (GIOM) pattern. Notably, there is no immediate support for ADA and the existing stability level at $1.03, adding further credibility to the short-term bearish prediction. Therefore, investors can expect ADA to gain a foothold around this barrier, where approximately 448,830 addresses that bought 7.78 billion coins are now profitable (In the Money).

ADA price

 Source: IntoTheBlock

Another reason ADA is unlikely to show an upward trend is that the number of large transactions has dropped from 5,100 to 4,900. This 3.9% decline shows that investors are not interested in current levels.

ADA price

Source: Intotheblock

All in all, the price seems poised to drop quickly to $1 – an important psychological level. The bearish outlook may be reversed if the bulls close a four-hour candle above $1.24.

This gives ADA time to rally to $1.45 (up 17%). After that, upside potential is likely to be capped here as this is the confluence of weekly resistance and the 100-day SMA.

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page