TLDR
- Cardano is trading in a three-week range near its long-term range lows
- Price currently threatens to shift to bearish market structure after falling below $0.74
- Trading below the 20-period moving average indicates bearish short-term momentum
- Santiment data shows network-wide accumulation since April
- Medium-term holders in profit (90-day MVRV at 26.5%) could potentially take profits
Cardano (ADA) has been confined to a trading range since December, with a smaller range forming in the past three weeks near its long-term range lows. While buying pressure exists, momentum remains lacking as the cryptocurrency struggles to maintain its bullish market structure.
On the daily chart, Cardano’s Bollinger Bands appear relatively wide, indicating present volatility despite the range-bound price action. The token had established a bullish market structure after recovering and reclaiming the $0.68 support level. This led to a rally in early May that created a higher low at $0.74.
However, at press time, ADA trades below this critical level, threatening to shift to a bearish structure. The price has also fallen below the 20-period moving average, suggesting bearish momentum in the short term.
The current short-term trading range spans from $0.73 to $0.84, with a mid-range level at $0.78. On the 4-hour chart, Bollinger Bands have tightened around the price as it gradually declined toward $0.73 over the past five days.
Technical Indicators Point to Bearish Pressure
Technical indicators on the 4-hour timeframe confirm the bearish momentum. Trading volume has decreased since May 24, but sellers have dominated the past three days, as shown by the On-Balance Volume (OBV) indicator’s gentle decline.
For Cardano bulls, a price drop to the $0.71-$0.725 area could present a buying opportunity, though it appears risky at current levels.
Data from Santiment reveals that short to medium-term holders are sitting on healthy profits. The 90-day Market Value to Realized Value (MVRV) ratio stands at 26.5%, while long-term investors show more modest gains with the 365-day MVRV at just 8%.
This profit margin for medium-term holders creates potential for profit-taking, which could trigger a sell-off. Such selling pressure would likely result in increased on-chain movement and register on the Mean Coin Age metric.
On-Chain Metrics Show Accumulation
The Mean Coin Age metric provides encouraging signs for investors, having trended sharply higher since early April. The recent price decline has not been accompanied by heavy selling, suggesting bulls may be strong enough to defend the $0.73 range low.
This ongoing network-wide accumulation signals that Cardano might be preparing to break above its short-term range highs if the trend continues.
Cardano bulls now face the challenge of overcoming current resistance levels to maintain the bullish structure established earlier this month. The key level to watch is $0.74, which must be reclaimed to prevent a shift to bearish market structure.
For now, the cryptocurrency continues to trade within its three-week range as market participants await clearer directional signals.
The sustained accumulation pattern visible in on-chain metrics suggests underlying strength despite the current price weakness. If this accumulation continues, it could provide the foundation for Cardano to eventually break out of its current trading range.
The post Cardano (ADA) Price: Market Structure at Risk as Token Falls Below Key Level appeared first on Blockonomi.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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