Cardano Price Prediction: ADA Drops Amid Further Crypto De-risking, Now Probing This Key Support Area

Key Points

• Cardano has slipped back under $0.50 on Tuesday amid broad downside in cryptocurrency markets as growth/geopolitical concerns dominate.
• ADA is currently probing its 21DMA and risks breaking its recent uptrend.
• But if ADA finds support here, it raises the likelihood of an ascending triangle upside break above $0.55.

Cardano Drops Amid Broad Pressure on Crypto Prices

ADA, the native token that powers the Cardano blockchain, has dipped a little over 3.6% on Tuesday and is down about 5.0% in the last 24 hours, as per CoinMarketCap, amid broad de-risking across cryptocurrency markets. Traders are citing concerns about a blow-up in US/China tensions amid a possible visit by US House Speaker Nancy Pelosi on Tuesday to Taiwan.

Recession concerns also remain front and center after manufacturing survey data out of the US, Eurozone, UK, China and elsewhere on Monday all pointed to a continued slowdown in global growth momentum. ADA/USD was last changing hands in the mid-$0.49s, the cryptocurrency’s lowest level since last Thursday.

But ADA has, for now, found intra-day support at its 21-Day Moving Average just under $0.49, a sign that the bears aren’t back in complete control. Nonetheless, at current levels under $0.50, the cryptocurrency is now down over 11% since last week’s highs $0.55. The fact that the Cardano network’s highly anticipated Vasil hard fork upgrade was delayed for a few more weeks last week likely contributed to why ADA was unable to break above the $0.55 resistance area.

Cardano Price Prediction: Can ADA Hold Above Key Moving Averages?

Whether or not ADA is able to hold above its 21 and 50DMAs in the coming sessions (in the respective $0.4890 and $0.4790 areas) may determine whether its recent uptrend has legs to continue. According to technicians, ADA has been forming an ascending triangle in recent weeks, with resistance $0.55 area acting as the ceiling, while the cryptocurrency has been posting higher lows since mid-July.

But a break below the 21 and 50DMAs could snap the trend of higher lows that has been seen in recent weeks and see ADA invalidate the recent ascending triangle pattern that has been forming. This would bring in the prospect of a test of recent $0.45 lows once again.

In a more bullish scenario where geopolitical tensions cool and market focus returns to a less aggressive Fed response as US (and global) growth weakens (which was a major theme driving last week’s rally), ADA, for now, retains the possibility of breaking $0.55 resistance to the upside. A break above $0.55 would open the door to a swift rally back to late May/early June highs in the $0.67-69 area.