DA Price Slumps Below $1

Cardano had a pretty exciting weekend, didn’t it? The price of ADA suddenly jumped by 60%, even breaking past the $1 mark on Sunday! This jump seemed to be triggered by the news that former US President Donald Trump unveiled his administration’s plans for a special stockpile of digital currencies – and guess what? Cardano’s ADA was on that list!

But, as often happens in the crypto world, the excitement didn’t last. It turns out the hype was a bit of a flash in the pan. ADA price has lost momentum, experiencing a 20% drop in the last day alone and unfortunately slipping back under the crucial $1 level.

Cardano Dips 20% in 24 Hours—Is the Rally Over?

So, what exactly happened? Well, ADA’s brief surge above $1 on Sunday came right after the announcement of a proposed US strategic crypto reserve. This reserve is planned to include five major cryptocurrencies: ADA, Bitcoin (BTC), Ethereum (ETH), XRP, and Solana (SOL).

However, it seems that the initial buzz around this proposal might have faded rather quickly. This could have led to many ADA traders deciding to take their profits and sell, contributing to the price decline. Right now, as we’re writing this, ADA price is trading around $0.82, which represents that 20% drop we mentioned from yesterday.

Looking at technical indicators on a daily chart also suggests that the demand for ADA is indeed weakening. Take the Relative Strength Index (RSI), for instance. It’s trending downwards, which is a signal that buying interest is decreasing. Currently, this key indicator, which helps us understand if an asset is overbought or oversold, is getting close to crossing below the 50 level.

This downward trend in the RSI is a sign of a shift towards bearish momentum. Generally speaking, when the RSI moves above 50, it suggests bulls are gaining control, but when it drops below 50, it indicates increasing pressure from sellers. So, ADA’s falling RSI suggests that more people are choosing to sell their coins to lock in profits rather than buying more right now, which unfortunately pushes the price further down.

Adding to this, ADA price is also on the verge of falling below its 20-day exponential moving average (EMA). This EMA is a key indicator that shows the average of ADA price over the last 20 trading days, with a greater focus on the most recent price movements.

When a price looks like it’s about to dip below its 20-day EMA, it usually signals that short-term momentum is weakening. If the price actually breaks below this level and stays there, it can be a sign of a bearish trend reversal, highlighting that selling activity is picking up. Therefore, if ADA breaks below this key level, it could be at risk of continued price drops in the near future.

ADA Eyes $0.94 if Buyers Step In

Currently, ADA price is trading at $0.82 and is sitting just above a support level around $0.72. Now, if the selling pressure gets stronger, there’s a chance this support might not hold. If that happens, ADA’s price could potentially fall further down towards the $0.60 mark.

However, this bearish outlook isn’t set in stone. If we see a comeback in demand for ADA, things could change quickly. If the profit-taking slows down and new buyers decide to jump into the market, it could very well push ADA price back up towards $0.94.

And, if ADA manages to successfully break through this resistance level at $0.94? Well, then we could see Cardano’s price climbing even higher, potentially reaching for a three-month high around $1.32.