Disclaimer: The following analysis is solely the writer’s opinion and should not necessarily be considered as investment advice.
- Despite the recent losses, Cardano saw little demand.
- In the weeks ahead, prices may drop again
In recent months, Cardano’s price action has been heavily bearish. The bears have lost many important levels since April. In the last month, Cardano wallets increased in number.
Furthermore, 66,000 transactions Adaverse reports that the Cardano network was completed just a few days ago.
Read Cardano’s [ADA] Price Prediction 2023-2024
They did not add any conviction to the lower-timeframe bulls. In the last three days, there was very little volatility. Traders with longer time frames can wait for the price to move higher before assessing whether there is a bearish trend.
The $0.315, $0.34 levels are firm, and bulls don’t have much power in the markets
On a daily timeframe, there was a downtrend. Long-term investors could wait for a shift in the trend before purchasing. As short-term plays are more time-sensitive, buying opportunities may be limited to shorter periods.
Since September, the Relative Strength Index has been consistently below the 50 neutral mark. The RSI was expected to rise above 60 in November. However, bulls were quick to realize that their hopes were dashed. Along with the price, the On-Balance Volatility (OBV) was also in a downtrend.
The price of ADA tried bounce on 15/11, but it turned out that the formation a bearish order bloc on the daily timeframe was the reason. ADA plunged from $0.329 down to $0.306 just a few days after a retest of the zone on December 5.
For years the $0.315 resistance level has been important. This was also the level the Cardano bulls fought with at the time. A drop below $0.3 could lead to ADA falling towards $0.245. An opportunity to shorten is offered by a retesting the bearish block at $0.33-338.
Active addresses are at a standstill, while dormant circulation saw an increase during the November selloff
Despite the sharp fall in prices in November, development activity saw a dramatic increase. This was a good sign for long-term investors as it showed that price trends didn’t matter on the development side.
In November, the dormant circulation (180-day), saw a significant spike. This indicated that a lot of previously dormant ADA was changing hands. This confirmed the notion that there was strong selling pressure during this week of panic and fear.
The $0.33-$0.34 zone will be a key resistance area in the next week. If this area is retested as support, it could signal a rally towards $0.36-$0.375