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The price of ADA has now entered a well-known selloff region, which coincided with a 40 percent price drop in January 2022.
Inching upward on March 25, Cardano (ADA) is on track to recover a significant chunk of the losses it suffered in February and March.
Cardano: Are you still positive on this coin?
Over the course of a month, the price of ADA rose by almost 7.5 percent to $1.19 in trade Friday. The surge in Cardano's value amounted to roughly 60%. Despite this, it remained at risk of losing its upward momentum in the next weeks.
Since September 2021, a multi-month descending channel pattern is at the heart of this bearish comparison since it has consistently caused and limited ADA's comeback efforts at the same time.
The top trendline of the channel, indicated in the chart below, has functioned as a good selling area, and is now being challenged as resistance.
An overbought reading of 71.80 on the daily relative strength index (RSI) also indicates ADA's current position. If all goes according to plan, an RSI reading above 70 should prompt to a sell-off in order to reduce the asset's exorbitant value. As a result, the Cardano coin faces an impending fall into the bottom trendline of the declining channel.
ADA's weekly charts show further evidence of a possible reversal. It's worth noting that the Cardano token's recent recovery has seen it challenge its 20-week and 50-week exponential moving averages, respectively, as resistance. In January 2022, they played a key role in preventing further advances for ADA.
According to Weiss Ratings analyst Alex Benfield, ADA must retake $1.20 as support in order to maintain its positive stance. This will increase the chances of a medium-term gain for Cardano tokens, he said.
"Until it clears that resistance, this move is in danger of losing momentum,"
The ADA is "fundamentally bullish."
MinePlex co-founder Alexander Mamasidikov feels the immediate prognosis for Cardano is favorable despite its overbought dangers.
He believes that the long-term success of ADA can be traced back to its inclusion in Grayscale Investments' new altcoin fund, which is called the Smart Contract Platform ex Ethereum (SCPE) fund (GSCPxE).
In his view, "the rise is indicative of how pleased investors are with the revolutionary role of the Cardano blockchain in the fast-growing smart contract-powered evolution of Web3.0," Mamasdikov claimed, but he agreed that levels near $1.50 might ruin ADA's upward surge. Excerpts:
"Drawing from ADA’s growth trajectory, the $1 price level remains the crucial support level while the coin’s resistance is pegged at $1.5 in the short to medium term."
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