Cardano struggles below $1, will it rise above its key support?

The price of Cardano (ADA) has been volatile along with the larger market trend. Bitcoin has lost 20% over the past week, with major altcoins not far behind. Bitcoin is back at levels not touched in months, causing other altcoins to drop sharply.

In just 24 hours, ADA has plunged 20%, and the token has lost more than 30% of its market cap over the past seven days. ADA has been one of the worst performing altcoins this month, causing investors and buyers to flee the market.

Continued selling could lead the coin to fall further and stay near the $0.40 mark. Among other worrying factors, such as rising inflation, rising interest rates and an impending recession, broader market weakness may continue to weigh on the stability of the crypto industry.

Cardano Price Analysis: Four-Hour Chart

At the time of writing, ADA is priced at $0.50, down more than 60% from its all-time high of $3 last September. The coin has almost noticed a 35-week downtrend, and the recent bearish price action makes it almost impossible for the coin to show a chance of a rebound. The coin continues to depict extreme oversold conditions.

Cardano at $0.50 on the four-hour chart | Source: ADAUSD on TradingView

The coin depicts a downtrend (yellow), confirming the bearish thesis. At current price levels, Cardano is likely to find support at $0.40.

Investors may see this situation as a buying opportunity, which could push the price of ADA higher. In the event of a rebound (which looks rather difficult), ADA could have a target price of $0.62.

Cardano’s volume shows a red bar indicating bearishness, which also means the coin is experiencing a sell-off at the time of writing.

technical analysis

Cardano
Cardano is oversold on the four-hour chart | Source: ADAUSD on TradingView

Cardano has attempted to retest its $0.62 level over the past few days, but bears have been dragging down the altcoin. At the time of writing, ADA is trading well below the 20-SMA line. This means that sellers are driving the price momentum of the coin in the market.

After breaking out of the downtrend, ADA made a brief attempt to bounce back, which brought the coin back into overbought territory as buyers saw a brief period of confidence on the RSI. After this, however, ADA barely recovered in terms of purchasing power as the coin continued to hover between oversold and underbought zones.

Related reading | ADA discount?Cardano whales go on a $200 million shopping spree

Cardano
Cardano turns bearish on the four-hour chart | Source: ADAUSD on TardingView

Continued bearish thesis has dampened investor spirits and the coin is currently in a distribution phase due to the sell-off.

Chaikin, which determines capital outflows, flows below the half line. This reading indicates that capital outflows are far greater than inflows.

Awesome oscillator telling price momentum, representing a magnified red histogram. The red histogram below the zero line implies bearish price action for the coin.

Related reading | Cardano (ADA) Real Volume Suggests Downtrend Is Far From Over

Featured image from UnSplash, chart from TradingView.com

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