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 are eagerly watching for signs of a recovery. Recent market trends have seen the price of Cardano experience a downward trajectory. However, before a recovery rally occurs, there is a crucial support level that ADA must touch.
Cardano suffers after failing to spark bullish confidence
On June 19, the price of Cardano (ADA) fell by more than 3%. This drop took the price of ADA to a daily low of $0.257, a figure that caught the attention of traders and investors. This drop was not an isolated incident but a reaction to Cardano’s inclusion in a list of digital assets that the US SEC classifies as “unregistered securities”.
Last week, the Fed hinted at a likely 50 basis point hike in 2023, a development that generally dampens interest in riskier assets. Such increases often cause investors to favor safer and less volatile investments, a trend that can have a significant impact on high-risk, high-reward altcoins like Cardano.
At the same time, open interest in ADA-linked derivatives has seen a significant decline. It fell to around $111 million, the lowest level since January 2021. This decrease in open interest indicates reduced trading activity or interest in ADA, which could impact its liquidity and volatility. prices.
In the past 24 hours, the market has seen sell-offs amounting to around $360,000. Long positions bore the brunt of these losses, with a staggering $341,000 being liquidated. This suggests that many traders who had anticipated higher prices instead decided to close their positions by selling ADA. This massive unloading of ADA likely added to the downward pressure on its price.
What to expect from the ADA price next?
The weekly price chart of ADA indicates a decline of 7%. Yet, since the market reversal on June 10, sellers have lost momentum, unable to drive the price down further. Given the strong support at 24 cents, bullish traders may have a window to send ADA price north.
After experiencing a sharp decline from $0.2682, the price of ADA gained support at $0.2571. Currently, the bears are losing control of the price chart as the bulls aim to push the ADA price above the EMA20 trendline.
At the time of writing, ADA price is trading at $0.2624, down over 1.9% in the last 24 hours. Analyzing the 4-hour price chart, ADA price is currently attempting to break above the resistance line, and a push above $0.3312 will send the altcoin to a crucial level at $0.383.
On the bearish side, if Cardano price breaks below $0.25, it may take support near $0.22. However, a push from this support will likely occur due to the buying sentiment on the downside.