The price of Cardano (ADA) has been fluctuating within a range for the past few months, rising before falling back to a particular mean position. Because of the oscillation, ADA’s upside potential has been constrained, and its price has been stuck in multi-month bands.
Cardano price tests crucial support
Cardano’s (ADA) price is currently challenging important support at $0.2397 for the fifth time this year, following a number of pullbacks following failed breakout attempts. The 50-, 100-, and 200-day Exponential Moving Averages (EMA) are around $0.2556, $0.2701, and $0.3001, respectively, to show the increasing overhead pressure for the altcoin.
The 50-day EMA and the horizontal line at $0.2556 could act as resistance as the price of Cardano moves north, possibly increasing by 5%. The $0.2397 support must hold in order for this to happen.
Notably, it is a technical tenet that the greater a support line’s relevance as a support level and, thus, the likelihood that a bounce would occur, the more times it has been touched. Hence, the predicted 5% northward movement
Investors in this situation should keep an eye out for a confirmation above the $0.2556 mark. If the anticipated bounce results in a robust break and closure above the indicated level, it would be clear that support was holding and a fresh upward movement was in progress. The bulk of ADA holders, according to on-chain data, are sitting on losses.
Up to 90.32% of ADA holders may be holding unrealized losses (out of the money), according to data from IntoTheBlock’s Global In/Out of the Money (GIOM), while only 4.74% may be holding unrealized profits (in the money). In the meantime, roughly 5% are making money.
Holders of Cardano are resting on unrealized losses, which is a modestly optimistic development. Due to their propensity to cling onto losses longer than necessary, investors are to blame for this. With this, the price of Cardano has some time to rise.
On the other hand, there would probably be a very dramatic move lower if the Cardano price records a daily candlestick close below $0.2397, a significant support level that has already been reached five times. This is due to the presumption that several touches on support tend to cause steep and dramatic sell-offs when they are broken.
If such a situation arises, Cardano’s price may hit the $0.2200 range low due to the bearish momentum.