The announcement that a leading broker recently listed ADA caused the price of the altcoin to rise by 1.14%. The MACD recently crossed to the downside, indicating a further drop until the price reaches the support area at USD 0.4182.
Most cryptocurrency investors fear that the price of Bitcoin and the leading altcoins may drop sharply. Due to its low volatility in recent pullbacks, Cardano (ADA) emerges as a hedge asset against a possible crash in the short term.
However, some fundamental facts may help the price of ADA to rebound from lows not seen in weeks.
ADA is trading at around USD 0.4570 and has accumulated a 2.5% gain over the last 24 hours. While its daily trading volume is above USD 454.81 million, its market capitalization is about USD 15.44 billion, according to CoinGecko.
The Listing of Cardano on Leading Brokers Might Boost Purchases
A leading broker has recently listed Cardano, exposing many users to the token. Thanks to the announcement, the price of ADA went up by 1.14%.
The US Federal Reserve (Fed) may make a significant rate hike for September, ruling out rates above 4% by 2023. That would lead to making the US dollar stronger amid a recessionary market.
In addition, a relevant short-term fact is that the investor sentiment index points to extreme fear. While this indicator can warn of a change in the trend, it also explains that constant sales may occur.
The Analysis of the ADA Price Reveals a Bearish Trend
The high volume area of Cardano might push the bulls to nearby resistance if they defend the support at USD 0.4432. However, there is a wide gap between the 25-, 50- and 100-period exponential moving averages (EMA).
The Moving Average Convergence Divergence (MACD) crossed to the downside, indicating a further drop after a selling histogram. That decline will keep moving until reaching the support area at USD 0.4182, thus leading to a significant bullish rally.
In addition, the Relative Strength Index (RSI) crossed below its moving average, showing that ADA will be in oversold areas soon. Although this indicator stands at 43 points, it will drop further in the short term.
The Volatility and High Volume of ADA Might Lead It to a Pullback
If the bulls defend the support at USD 0.4432, there might be a bullish rally until the price retests the resistance at USD 0.4612. However, due to the volatility and high trading volume of ADA, the price will be unable to break through that level, leading to a reversal.
Meanwhile, Bitcoin is trading at around USD 20,075 and has accumulated a 1.6% gain over the last 24 hours. While its daily trading volume is above USD 23.10 billion, its market capitalization is about USD 384.23 billion, according to CoinGecko.
Investors should monitor the behavior of the market and external factors before buying ADA or any other crypto asset. That would allow having a better perspective of its current state to avoid the loss of money.
By Alexander Salazar
