Cardano is approaching a crucial point on the higher timeframe, with price sitting near a long-standing support zone around $0.240.
Notably, recent upward momentum has stalled, as Cardano ($ADA) could not sustain bullish momentum again. A good start to the week saw it reach an intraday high of $0.256 on Monday before facing renewed downward pressure. What could happen next for $ADA at this point?
Key Points
- Cardano is approaching a crucial point on the higher timeframe, with price sitting near a long-standing support zone around $0.240.
- This level has been in place since late 2022 and has repeatedly drawn buying interest.
- $ADA is currently compressing within a descending triangle, with the 50 EMA acting as an additional resistance.
- In the near term, the reaction around the $0.24 level will likely determine the next direction.
- A decisive break below this zone would confirm the ongoing downward structure and open the door for further corrections.
Cardano Targets Key Support
According to a TradingView analysis by Dukes, the momentum seems to be tilting lower. He suggested that Cardano is retesting a multi-month support area around $0.240, which has great significance to prices.
This level has been in place since late 2022 and has repeatedly drawn buying interest, making it one of the most closely watched areas on the chart right now. At the current price of $0.245, $ADA is just a whisker away from this key area.
Notably, this region aligns with a descending channel support on the daily chart. Cardano has held within this structure since February 25, making clear lower highs but repeatedly retesting its horizontal support.
While the level still holds, the analyst noted that behavior around this zone is beginning to shift. Each rebound attempt has been weaker than the last, suggesting that sellers are stepping in earlier and limiting further upward moves. For context, Monday’s high of $0.256 falls short of the last lower high of $0.268 on April 17 and the earlier high of $0.276 on March 25.
At the same time, Cardano’s price is capped below the descending 50-day exponential moving average. This adds another layer of resistance to any rebound attempt.
Cardano Price Compression
The current setup shows price gradually compressing into support within the current descending triangle rather than bouncing cleanly away from it.
Although buyers have managed to defend the area so far, they have not generated sufficient follow-through to sustain an uptrend. This type of movement often reflects mounting pressure as $ADA builds momentum for the next decisive directional move.
Momentum indicators add to this uncertainty. The relative strength index (RSI) is hovering around 50, pointing to a lack of clear direction. Additionally, there is no strong sign of bullish divergence despite Cardano being at such a critical zone, which would normally hint at a stronger recovery attempt.
$ADA Reaction at $0.24 Matters
The analysis highlighted that the overall trend remains tilted to the downside, reinforced by the sequence of lower highs and the inability to break above key resistance levels. Additionally, holders use rallies as opportunities to sell, stalling attempts of a sustained move higher.
In the near term, he noted that the reaction around the $0.24 level will likely determine the next direction. Holding above it could allow for a temporary bounce toward the descending triangle’s resistance.
However, a decisive break below this zone would confirm the ongoing downward structure and open the door for further corrections. If this happens, the next area of interest is the multi-year support at $0.220.
Meanwhile, on-chain data provides some optimism. Specifically, open interest has increased by 3.4% in the past 24 hours to $451 million, signaling growing derivative appetite. Spot outflows have also surpassed inflows in the past 24 hours, signaling that holders are buying the dip rather than distributing.
