Cardano (ADA), 25% Rebound Betrayal...18% Further Decline Warning at $0.2 Wall

▲ Cardano (ADA)

Cardano (ADA) encountered a wall at $0.20 after a 25% rebound, receiving a warning of a potential further decline of up to 18%.

According to FXStreet on August 5 (local time), Cardano's upward momentum stalled at $0.20 the previous day, giving back some of its recent gains. The demand from individual investors, which had revived with a 14% surge last week, is also rapidly weakening. Inter-blockchain communication (IBC) connecting Cardano and Injective (INJ) was activated, but selling pressure emerged after the positive announcement.

Warnings also intensified in the derivatives market. According to CoinGlass, Cardano futures open interest decreased by approximately 6% in 24 hours, reaching $514.34 million. The open interest-weighted funding rate also dropped to -0.0026%, indicating an increase in positions betting on a decline.

Technical trends also pointed to the possibility of a short-term correction. Cardano formed a gravestone Doji candle near $0.20, indicating exhaustion of the upward trend. While it held above the 50-day exponential moving average (EMA) of $0.1761, it fell significantly short of the 200-day EMA of $0.2598, which limits long-term trends.

If the closing price continues to form below $0.1761, the downside target could drop to $0.1382, the low of June 25. The projected decline is approximately 18%. The Relative Strength Index (RSI) recorded 64, retreating from the overbought threshold, but the Moving Average Convergence Divergence (MACD) and signal line maintained an upward trend above the baseline, indicating that the rebound momentum has not completely disappeared.

To revive the upward trend, a decisive break above $0.20 is necessary. If this resistance level is surpassed, the 200-day EMA of $0.2598 is presented as the next key target. Whether $0.20 is broken and $0.1761 is defended will be the criteria for determining Cardano's short-term direction.

[Article Key Summary]

-Cardano's upward momentum stalled at the $0.20 resistance level after a 25% rebound.

-Futures open interest decreased by approximately 6%, and the funding rate dropped to -0.0026%.

-If $0.1761 is broken, there could be an additional decline of about 18% to $0.1382.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*