Cardano’s (ADA) price is desperately holding onto the $0.35 support level amid attempts to push the altcoin down further. Despite this, ADA is struggling to generate the momentum needed to reverse its downtrend. This analysis examines the challenges facing ADA and whether the support can withstand mounting bearish pressure.
During the first days of October, Cardano's price cratered to $0.30. After reaching $0.40 just days earlier, ADA, like many cryptocurrencies, began a decline. The downward trend raised concerns about a potential return to the $0.30 level.
However, as of now, ADA has managed to stay above that point, with bulls defending the $0.35 support. Despite this resilience, the Exponential Moving Average (EMA) indicates that Cardano remains vulnerable to bearish trends.
The EMA measures trend direction and utilizes particular crossovers to determine potential price movements. When the longer EMA crosses above the shorter one, the trend is bearish. Conversely, if the shorter EMA is above the longer one, the trend is bullish.
The 20 EMA (blue) and 50 EMA (yellow) have nearly converged, signaling a critical moment for Cardano’s price. However, with the price sitting below both indicators, the likelihood of a bearish trend grows stronger.
Supporting this outlook is the Average Directional Index (ADX), a key tool for measuring trend strength. When the ADX surpasses 25, it suggests a strong directional movement. In contrast, a reading below this level indicates weakness. Currently, ADA's ADX stands at 18.86, suggesting that the recent upward movement lacks the strength to persist.
Further assessment of the daily chart shows that ADA could face resistance at $0.36 in its attempt to climb higher. If that happens and the cryptocurrency fails to break above this level, it could pull back, and the uptrend might be invalidated.
If that were to occur, ADA’s price might drop below the $0.35 support, with the next potential target being $0.31. Reaching $0.31 might put the token at risk of another downtrend, especially if broader market conditions fail to improve.
However, Cardano might resist falling that low if the price flips the 20 and 50 EMAs. In such a scenario, the trend would shift to bullish, potentially leading ADA to reach $0.40 and possibly $0.48 in the mid-term.
