The price of Cardano (ADA) fell more than 3% on June 19 after falling more than 30% in the past two weeks. Is the price of ADA set for its fourth consecutive red weekly candle?
Cardano price bulls have no respite
ADA prices fell more than 3% to a daily low of $0.257 on June 19 as traders continued to evaluate Cardano’s mention on the SEC’s list of crypto assets deemed “unregistered securities.”
Also, last week’s hawkish guidance from the Federal Reserve did not help ADA prices, with another 50 bps hike now likely in 2023. Higher interest rates generally reduce investor appetite for risky assets like Cardano.
At the same time, open interest in derivatives related to ADA also increased drop to about $111 million, the lowest level since January 2021.
About $360,000 was liquidated over the past 24 hours, with long positions losing the most at $341,320. In other words, more bullish traders closed their positions by selling ADA, which could add to the downward pressure on June 19.
Additionally, ADA’s intraday price drop on June 19 coincided with a 0.15% rise in the US Dollar Index (DXY). These contrarian moves could break the positive daily correlation coefficient of the current yearly high of 0.82 in the coming days.
In other words, if the dollar gains in June, ADA could continue to fall as the latter enters a rally phase within its prevalent symmetrical triangle pattern.
ADA Bullish vs. Bearish Scenarios
Bullish Cardano traders showed resilience against the SEC blow two weeks ago, as confirmed by a bullish rejection candlestick on June 5.
Since then, the price of ADA has risen by more than 15%, but remains “oversold” with a daily relative strength index (RSI) below 30.
These technical indicators suggest that ADA consolidation or recovery may be prolonged.
In addition, a descending triangle If this bullish scenario plays out, it will come into play. The uptick will target $0.30 in the coming weeks, representing a 16.5% gain from current price levels.
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Conversely, a breakdown of the descending triangle could lead to a 12% drop in the coming weeks to $0.226 — a potentially significant support area.
This article does not contain investment advice or recommendations. Every investment and transaction involves risk, and readers should do their own research when making a decision.
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