In recent market movements, Cardano (ADA) faced significant challenges as the price fell below the crucial level of $0.348, signaling the strong control exerted by bears. Both daily and 4-hour timeframes indicated a bearish outlook, shedding light on potential downward targets for the cryptocurrency.
Analyzing the 1-day chart, the market structure of ADA appeared bearish, with sellers firmly in control. The breach of the $0.371 level further solidified the dominance of bears. This selling pressure persisted over the past week, despite Cardano showcasing promising performance in areas such as DeFi activity and development.
Adding to the market's unfavorable sentiment for buyers, the news of the U.S. Securities and Exchange Commission (SEC) suing Coinbase and Binance US provided the necessary impetus for bears to drive prices even lower.
Examining the daily timeframe, the drop below the $0.3485 support level indicated that ADA was on its way to forming a new lower low, perpetuating the ongoing downtrend. Looking south, traders identified the $0.297 low from March as a possible target in the coming months.
Shorter-term support levels were highlighted based on the 4-hour chart, with the $0.3366 level demonstrating significant respect on June 6 before a bounce to $0.357 occurred. Therefore, ADA traders should closely monitor the $0.3366 and $0.3157 levels as potential future support areas.
The On-Balance Volume (OBV) had been in a gradual downtrend since mid-April, indicating a decrease in buying pressure. However, trading volumes did not exhibit notable strength in the past three weeks, resulting in an insignificant drop in the OBV during June. On the other hand, the Relative Strength Index (RSI) indicated an increasing bearish momentum.
Throughout May, the 90-day mean coin age exhibited an upward trend, suggesting an accumulation of ADA across the network. However, recent trading days witnessed a rise in bearish sentiment, leading to a 10.7% price decline within a 72-hour period.
It is worth noting that the dormant circulation of ADA did not reach the levels seen in April or May. This observation implies that the price drop might have been fueled by panic selling, while long-term holders persevered. The ability of these holders to reverse the downtrend remains uncertain and will require further observation.
As with any market analysis, it is important to remember that conditions can change rapidly. Traders and investors should stay informed and adapt their strategies accordingly, considering the latest developments and market dynamics when making decisions related to Cardano.