Cardano (ADA) Recovers After Deep Dive Towards $1 Level
Cardano (ADA) is trading mostly steady after posting a recovery following its fall close to the key $1 level amid a sharp sell-off in the wider crypto market over the past few sessions. At the time of writing, ADA/USD is trading at around $1.13.
After soaring to record highs through the bull run that started late last year and extended into the first few months of the year, Cardano as well as other digital assets were dragged lower over the past couple of months ever since China came down hard against cryptocurrency mining. Since then, they faced additional downward pressure as regulators across the world cautioned investors against their volatile and unpredictable nature, and increased scrutiny in the space.
Cardano enjoyed some support after the crypto market crash from promising developments, especially related to the upcoming upgrade that is likely to enable smart contract capabilities in the network. This much needed feature will finally allow the blockchain to compete with Ethereum and take away some of its sheen in the DeFi space.
Even as the current sell-off keeps retail investors wary of stepping into the game and buying up cryptocurrencies, institutional investors are still very much interested in getting in on the action. According to a recent report on CoinDesk, the prime brokerage unit of the Bank of America (BofA) has started the clearing and settlement of crypto ETPs for Europe-based hedge funds. A development like this could offer some positive news and potentially cool down the selling pressure cryptocurrencies have been experiencing lately.
Key Levels to Watch
On the H4 chart of ADA/USD, the smaller timeframe MAs (10 and 20 SMA, EMA) and leading technical indicators MACD and momentum are exhibiting a bullish bias. However, the remaining MAs point to the presence of sellers looming as well.
Cardano’s price is sitting well below the pivot point at $1.23 but is holding above the immediate support at $1.09. An increase in selling pressure can send the price below this level to test the next support at $1.01.
On the other hand, a build-up of buying interest can take the price higher, past the pivot point, to test resistance at $1.31.