Cardano (ADA) has recorded an increase of over 12% in the past 7 days, currently trading at the $0.7 threshold for the first time since late March. Alongside the price increase, trading volume has also exploded, rising 33% in just 24 hours, reaching $723 million.
However, despite this impressive recovery, some technical indicators are showing signs that ADA's price momentum is weakening and approaching important resistance zones. Below is a more detailed look at Cardano's current setup as the market enters a new trading week.
Cardano's BBTrend indicator is currently at 7.55, significantly decreased from the peak of 13.27 just 3 days ago. The sharp decline of this indicator clearly reflects the weakening strength of the recent price expansion - despite ADA still recording four consecutive green closing sessions.
The downward BBTrend suggests that although ADA's price has risen to higher levels, the underlying momentum behind this increase is gradually diminishing. This raises concerns that without new buying pressure, ADA may struggle to maintain its current upward momentum and face the risk of correction.
BBTrend (Bollinger Band Trend) is an indicator that measures price trend strength based on the expansion or contraction of the Bollinger Bands. When BBTrend increases, it typically reflects strong momentum and increased market volatility. Conversely, a decreasing BBTrend signals a weakening trend or that the market may be entering an accumulation or consolidation phase.
Currently, ADA's BBTrend is at 7.55, still showing the presence of upward momentum, but much weaker than the peak earlier in the week. This signal implies that the driving force behind the recent price increase is noticeably declining.
If this indicator continues to decline, ADA may enter a sideways or short-term correction phase. However, if demand returns early, especially from institutional investors or new capital inflows, the token still has the potential to extend its series of positive price sessions in the short term.
Cardano's Directional Movement Index (DMI) is currently sending a clear signal of a weakening market trend. Specifically, the Average Directional Index (ADX) - a measure of trend strength - has sharply dropped to 17.14, compared to 31 just two days ago. This decline indicates that ADA's recent upward momentum is losing its pulling power.
Meanwhile, the positive directional indicator (+DI) is at 19.95 - slightly increased from 15.96 a few hours ago, but still significantly lower than the 26 recorded two days ago, showing that buying pressure is recovering slightly but still not strong enough to re-establish dominance.
In contrast, the negative directional indicator (-DI) is at 19.07 - slightly decreased from 21.16 previously, but still higher than the 14.49 from two days ago. This change indicates that selling pressure is still present and the market is in a state of tug-of-war between buyers and sellers.
Overall, the signals from DMI show that ADA is gradually losing a clear trend, and if there is no breakthrough in demand, it is likely that the price will continue to fluctuate in a short-term accumulation zone.
The ADX (Average Directional Index) is used to measure the strength of a trend but does not reflect the direction of that trend. Typically, values above 25 indicate a strong trend forming, while levels below 20 reflect a weak market or a consolidation state.
With ADA's current ADX at only 17.14, the signal shows a rather dim market momentum. Neither buyers nor sellers have clearly gained an advantage in a general trend lacking driving force.
Moreover, the distance between the +DI and -DI indicators is narrowing, indicating a tug-of-war between supply and demand. This further reinforces the possibility that Cardano may enter a sideways phase, unless the bulls or bears quickly create a clear breakthrough to regain market control.
Cardano's Exponential Moving Averages (EMA) continue to show an upward trend, with short-term EMAs positioned above long-term EMAs - a structure typically reflecting market optimism.
However, recent price action shows increasing caution. ADA has repeatedly tested the support zone at $0.69 and is currently trading very close to this level. The price continuously returning to test support despite an overall positive trend is a sign that upward momentum is weakening.
The $0.69 zone is therefore becoming a decisive support level. If buying pressure is not strong enough to maintain the price above this level, ADA may enter a short-term correction or sideways phase. Conversely, a strong bullish reaction from this zone could create a premise for the next recovery.
If Cardano fails to maintain the critical support zone at $0.69, the correction could expand with successive downward targets of $0.63, $0.609, and deeper at $0.59 - especially if selling pressure continues to increase in the coming sessions.
Conversely, if buying pressure returns strongly enough to reverse the short-term trend, ADA could recover and move to retest the nearest resistance zone at $0.746. A definitive breakout above this level would be a confirmation signal for a more distinct price increase, with a potential target towards $0.77. In that case, ADA could re-establish a strong upward trend, especially if momentum is supported by high trading volume and a more positive market sentiment.
Disclaimer: The article is for informational purposes only and is not investment advice. Investors should thoroughly research before making decisions. We are not responsible for your investment choices.
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Minh Anh
