Altcoins got off on the wrong foot on Monday after Bitcoin continued to shed value below $43K. The world’s seventh-largest digital asset, Cardano, was no exception to the broader market trend. However, ADA had touched a safe zone on the lesser time frame – a region that has not been breached for a year. With the RSI also trading at oversold levels, buyers were expected to lift ADA from the doldrums and trigger an upwards run. At the time of writing, ADA traded at $1.03, down by 2.2% over the last 24 hours.
Cardano 4-hour Chart
Cryptocurrencies have presented several “buy the dip” moments of late, following Bitcoin’s flash crash in January. Cardano’s buy opportunity has come to light each time its price has traded between $1.02-$0.92. The region has been a haven for bullish investors, triggering multiple bull runs over the past year. More specifically, ADA’s upwards run could come to light right after the price tags of $1.008 support.
A bullish rebound would set a fresh high in motion, although it’s important to note that a larger downtrend was in play. ADA has just formed a single higher high since November 2021 as bears maintained a firm grip on the market. Hence, the next lower high could be formed between the lower limit of a supply zone at $1.20 and the 61.8% Fibonacci level. A move past $1.26 could even disrupt the downtrend and lead the way to 27 December’s swing high of $1.60.
The bullish outcome was supported by extreme readings on the 4-hour metrics. As per the RSI, ADA has traded below its perceived intrinsic value for the last two days. Furthermore, a bullish crossover was developing on the MACD, giving way to a potential buy signal.
However, the bullish narrative would be delayed if ADA succumbs to broader market pressure and slips below $1.008. The move would force bulls to look for deeper support levels at $0.95,$0.94, or even $0.925.
Conclusion
Cardano has tagged an important support region and looks forward to its next rally. With buy signals on the indicators, ADA’s near-term outlook was certainly looking favorable.