Cardano (ADA) continues to face challenges as it breaks a critical support level, indicating a potential continuation of the bearish trend. The breach of the $0.458 support level and the test of the $0.420 support level suggest that selling pressure has outweighed buying interest at these levels.
A recent analysis also highlighted a bearish outlook for Cardano based on on-chain data that revealed a decline in user engagement and short-term trading activity. The current price of $0.439 is trading below the 50, 100, and 200 EMAs on the daily timeframe.
The price has fallen back into the critical support range of $0.43 – $0.46, indicating a bearish trend. Moreover, Cardano’s attempt to break above the 50 EMA and reach $0.48 was rejected when it entered the Ichimoku Cloud, further signaling a bearish technical outlook. Key resistance levels that could reverse the trend are identified as $0.458, the daily Ichimoku Cloud, and the Ichimoku baseline.
Additionally, a decline in new and active addresses on the Cardano network highlights waning user interest and reduced network activity. This reduction in participation correlates with decreased buying pressure and market interest, further supporting a bearish outlook for ADA.
Traders are advised to closely monitor key support levels at $0.458, the baseline of the daily Ichimoku, and the daily Ichimoku Cloud. Breaking above these levels could signal a potential move towards the critical resistance at $0.522. Conversely, a breakout below the $0.420 and $0.400 support levels could indicate a very bearish trend. To manage risk effectively, it is recommended to place stop-loss orders below these levels.