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Cardano Price Analysis: ADA Struggles With Recovery As Losses To $0.33 Linger

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Cardano Price Logo
Cardano Price Logo

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Cardano (ADA) struggles to escape from a bearish chart pattern as the bearish cloud remains hanging over the crypto industry. ADA is down 0.83% and still trades below the $0.4 level after breaching it on May 6. However, a bullish signal from the Moving Average Convergence Divergence (MACD) indicator could mean that ADA is ready for a recovery.

Cardano Price Faces Stiff Resistance On The Upside

After turning away from the $0.462 reached on May 15, ADA price has recorded a series of lower highs and lower lows leading to the appearance of a descending parallel channel on the daily chart.

A descending channel is a highly bearish chart pattern that points to a continued downtrend as long as the price remains within the confines of the technical formation.

ADA trades at the upper boundary of the channel at $0.368 as bulls fight to flip this level back into support. If they succeed, the smart contracts token will rise higher first toward the 100-day SMA at $0.376 and later the 50-day SMA to $0.391. 

Higher than that, the altcoin may rise to tag the $0.395 major resistance level. This is where Cardano’s upside could be capped in the short term, representing a 7.57% uptick from the current price.

ADA/USD Daily Chart

Cardano Price Chart - May 22
TradingView Chart: ADA/USD

Supporting the upside potential for Cardano was the upward-facing Relative Strength Index (RSI). This indicated that the buyers were re-entering the market.

In addition, the upward movement of the MACD also added credence to the bullish thesis. Note that this trend-following indicator had just sent a call to buy Cardano on the same daily chart. This occurred during the early Asian trading hours on Monday when the 12-day Exponential Moving Average (EMA) crossed above the 26-day EMa. This suggests that the market has flipped in favor of the upside.

On the downside, ADA faced stiff resistance in its recovery path. This is reinforced by on-chain data from Intotheblock. Its In/Out of the Money Around Price (IOMAP) model showed that the area where the 50-day SMA sits is within the $0.3793 and $0.391 price range. This is where approximately 4.62 billion ADA tokens were previously bought by roughly 196,840 addresses.

Cardano IOMAP Chart

Cardano IOMAP Chart
Source: IntotheBlock

Any attempts to push the Cardano price past this level would be met by immense selling from this cohort of sellers who may wish to break even.

Note that a daily candlestick close below the 200-day SMA at $0.351 would invalidate the bullish outlook. The next logical move would be a drop toward the lower boundary of the governing chart pattern at $0.329, representing an 11% decline from the current price.

Promising Alternatives To ADA

Those seeking to place their long bets on Cardano have to wait for a decisive close above the 50-day SMA at $0.351. This would confirm a clear bullish breakout, marking the start of a sustained recovery. 

Before that happens, investors could turn to new cryptocurrency in presale with low risk-to-reward ratio and a potential to make 10x returns in 2023.

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Investors who move quickly to secure tokens now at the current presale price of $0.0000308 can be sat on paper gains of around 9%, given that the AiDoge token will debut across major cryptocurrency exchanges later this year at a price of $0.0000336.

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