Cardano (ADA) Price Reclaims $0.80, but Rally Remains Uncertain

Key Takeaways

• Cardano’s price faces resistance despite its recent 15% hike and support at $0.68.
• The price DAA divergence presents a sell signal as user activity drops on the network.
• Momentum is neutral, but selling pressure has increased; where does this leave ADA?

Cardano (ADA) has successfully reclaimed the $0.80 mark after falling below it on Feb. 5.

However, despite the recent price increase, Cardano’s price may struggle to build on the rebound.

While this is due to several factors, key resistance levels remain intact, and the broader market condition seems to be playing a key role.

Considering the outlook, the question remains: Can ADA maintain its momentum, or is a reversal on the horizon? Let’s find out in this analysis.

Cardano Encounters Hurdles Amid Recovery

Cardano’s price experienced a freefall from $1.15 to $0.68 between Jan. 17 and Feb. 10. This represented a 40% decline.

However, since last Monday, ADA’s price has jumped by 15%, erasing part of these losses. According to the daily chart, the initial price decrease formed a descending triangle.

A descending triangle is a pattern characterized by a descending upper trendline and a flat horizontal trendline. The pattern typically signals a potential breakdown, with the price moving toward the lower support level.

However, with ADA, the support at $0.68, prevented another correction. This played a key role as the price bounced to $0.80.

Despite the rebound, Cardano’s price remains below the Ichimoku Cloud, which shows support and resistance.

When the cloud is below the price, it indicates support. But in this case, it is above it, indicating significant resistance around ADA.

Should this remain the same, then Cardano’s price might struggle to keep jumping.

From an on-chain perspective, the price Daily Active Addresses (DAA) divergence has remained in the negative region. This indicates that, as ADA’s price increased, user participation on the chain dropped.

If this trend continues, Cardano might not see a significant hike from $0.80, as stated earlier.

ADA Price Rally Prospects Fade

Meanwhile, analysis of the 4-hour chart also seems to agree with this position. As Cardano’s price increased, the Chaikin Money Flow (CMF) dropped below the zero signal line, as shown in the image below.

The decline in the CMF reading indicates a bearish divergence, indicating that ADA is facing selling pressure. The Moving Average Convergence Divergence (MACD) also shows a reading close to the neutral line.

With the 12 EMA (blue) and 26 EMA (yellow) hovering around the same region, the MACD shows that the momentum around ADA is not bullish.

If this remains the same, Cardano’s price could decline to $0.72. If selling pressure increases, the cryptocurrency’s value could fall to $0.66.

However, this trend might change if bulls break above the resistance ahead and buying pressure increases.

Cardano’s price might rally to $0.90 in that scenario or break the $1 mark.