Will Cardano Bounce Back? The Significance of $0.39 Support Levels

Cardano (ADA) made significant gains last week, surging by 20% from September 23 to September 27. This surge pushed the price near the critical resistance level of $0.418. During this period, the technical indicators consistently showed a bullish outlook for ADA. The market appeared ready for a large rally, and the rise in active addresses pointed to increasing organic demand.

However, Bitcoin’s (BTC) recent dip from the $66,000 resistance level negatively affected Cardano’s price momentum. Despite this, the long-term prediction for Cardano remained optimistic. Yet, the failure to reclaim a crucial retracement level posed a concern for the bulls.

Range Breakout and Fibonacci Retracement

In July and early August, ADA experienced a sharp downward price movement. By analyzing this trend, analysts identified key Fibonacci retracement levels. Among them, the 78.6% retracement level at $0.418 stands out as a critical point for Cardano bulls. Reclaiming this level is necessary for ADA to shift to a long-term bullish trend.

*ADA Price Analysis. Source| TradingView*

Over the past two months, ADA has been trading within a defined range, with support at $0.312 and resistance at $0.393. Last week’s bullish momentum drove the price above the range highs. However, it failed to break past the $0.418 retracement level. In the past three days, ADA has faced a 7% decline.

Cardano Price Prediction: Analyzing the $0.39 Liquidity

Despite the recent price dip, the Chaikin Money Flow (CMF) remains above +0.05, indicating strong capital inflows. Moreover, the daily RSI continues to signal bullish momentum. This suggests that the $0.387 level could serve as a short-term support zone before ADA resumes its upward movement.

We are on twitter, follow us to connect with us :- @FXCryptoNews
— FXCryptoNews (@FXCryptoNews) December 14, 2023

In recent trading hours, ADA has swept the liquidity around the $0.39 level. This could trigger a bullish reversal toward the $0.408 zone. However, bearish short-term momentum surrounding Bitcoin may drag Cardano prices down later this week. Therefore, traders should remain cautious and prepare for potential rejections near the range highs.

Disclaimer: The information in this article should not be considered financial advice, and FXCryptoNews articles are intended only to provide educational and general information. Please consult with a financial advisor before making any investment decisions.