Cardano’s ADA token has had a rough year in 2023, with the price declining from highs above $1 in early 2022 to current levels around $0.24. This week, ADA is down around 4%, continuing its downward trajectory as buyers remain hesitant to step in.
ADA is now trading right around the $0.24 level which has emerged as a key support zone during 2023. This area provided support multiple times in August and June, and now it appears to be the last line of defense before a potential plunge below $0.20.
The technical picture reflects the weakness, with a falling wedge pattern emerging on the daily chart. Typically this pattern leads to an eventual bullish breakout, but so far ADA has been unable to mount any sustained rally.
Momentum indicators reflect the bearish outlook, with the MACD showing downward momentum as the MACD line trades below the signal line. Additionally, the RSI is below 45 which points to oversold conditions in the near-term.
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If the $0.24 support level gives way, ADA could be in real trouble. There is not much support below until the $0.20 zone which would likely trigger additional stop loss selling. The next major test comes around the $0.30 resistance area which capped the token multiple times in 2023.
Overall, ADA holders need to be cautious here. The multi-month downtrend remains firmly intact, and a drop below $0.24 could lead to a capitulation down to $0.20 or lower. The best strategy may be to set tight stop losses on any positions and wait for a technical turnaround before turning bullish again. If $0.24 fails, the path of least resistance for ADA appears to be sharply lower.
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