Cardano Price Analysis

Cardano’s range formation since December has curtailed all price expansion
The $0.78 support zone is likely to see a strong price bounce towards $0.9 next week

Cardano (ADA) witnessed a 72% price rally on Sunday, March 2, due to news that the U.S. crypto strategic reserve would include Cardano as well. Since then, ADA has retraced most of its gains on the charts.

As of writing, it was trading within a key support zone that had previously been a resistance level in February. From a technical perspective, Cardano seems to offer swing traders a buying opportunity.

Cardano Falls Below Mid-range Support, But Buyers Should Look to Bid

The strong pump last weekend indicated a bullish market structure. However, this structure was less significant currently, as ADA has traded within a range (purple) since December. It was the fourth day in the past week that the price tested the $0.8 demand zone.

The Directional Movement Index indicated a strong uptrend, with both the ADX (yellow) and +DI (green) above 20. However, the On-Balance Volume (OBV) had yet to decisively break its range formation.

Lack of persistent buying pressure suggests that Cardano may remain range-bound in the coming days or weeks. The significance of the previous month’s resistance being retested as support is noteworthy, hence bulls are targeting a move to $1.15-$1.2 next, with the range high at $1.135.

The 3-month liquidation heatmap spotlighted the $1.2 level as a key area. The density of liquidation levels indicates that bulls may face challenges pushing the price higher.

The liquidity cluster may attract prices but could also be followed by quick rejections, a pattern that has persisted since January. Alternatively, strong momentum could trigger a liquidation cascade, although buying volume remains absent.

The 2-week liquidation heatmap revealed additional risks for ADA bulls beyond the $1.2 level. The closest dense liquidity pockets were at $0.78-$0.8. Thus, a move to $0.78 could likely lead to a strong bounce to $0.9.

Further gains will depend on volume, sentiment, and the overall market conditions, particularly regarding Bitcoin (BTC).

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion