Cardano’s (ADA) – Bears retaining control of the reinsPosted on Monday, January 24 2022 at 9:09 pm GMT+0000
Cardano’s (ADA) strong psychological hurdle of 1.00 failed to block the downfall as intense selling pressures pushed the price of the sixth biggest currency lower extending last week’s sharp losses.
As things stand, the expansion of the upper and lower Bollinger bands suggests increased volatility. Although the ROC and the RSI are drifting southwards, both oscillators have been moving against the market direction for the last 4 sessions, printing higher lows. This reminds of a bullish divergence, a warning that the bears could be running out of fuel and supports the idea of further price swings and potentially a bullish corrective wave.
At the moment, sellers are controlling the game and are expected to push the price towards the 161.8% Fibonacci extension level at 0.71. Breaching this support base, the next defense could prevail from the support line of the bearish channel.
In the unlikely scenario where bulls manage to curb bearish pressures and pull the price above the 1.00 hurdle, the middle Bollinger band around 1.24 should play a restrictive role in offsetting bullish pressures.
All in all, Cardano bears have the upper hand and failure to rebound from current levels will confirm a divergence trap likely stretching recent losses towards 0.71.