Despite the expectation of “Valentine,” the Cardano SECP upgrade set to deploy on February 14, 2023, bears continue to dominate the ADA market. This bear control occurred when ADA bulls failed to maintain resistance at the intraday high of $0.3737. Nevertheless, this update may improve Cardano’s security and interoperability, attracting many investors and raising traders’ expectations of a bull run once it launches.
The bears have reduced the ADA price by 6.11% as of press time to $0.3495. However, market opinion about Cardano remains favorable as they await the upcoming upgrade.
Due to fear of more price declines, market capitalization declined 6.12% to $12,098,288,061, while 24-hour trading volume increased 71.79% to $368,108,582. This rise in trading volume implies more significant trading activity and investor excitement as the ADA price rally progresses.
ADA/USD 24-hour price chart (source: CoinMarketCap)
The bearish bias is strengthening as the Keltner Channel bands fall south on the 4-hour price chart, with the upper band now at 0.377 and the lower band at 0.349. Traders are becoming more convinced that a substantial move to the downside is impending. With the development of a red candlestick, when the price drops below the bottom band, it is evident that a bearish trend is underway. With the bearish bias confirmed by the Keltner Channel bands, traders should increase their short positions or, at the very least, tighten their stop losses to guard against future declines.
The MACD line is trending below its signal line and into the negative territory at -0.006, indicating that the bearish hand may continue.
Therefore, while the MACD line shows no indications of recovery, the pessimistic attitude is likely to persist. Furthermore, the histogram reading of -0.001 is consistent with the MACD, suggesting that the selling pressure will remain as the gap between the two lines widens.
The ADA price chart’s stochastic RSI value of 0.00 and downward trajectory relative to its SMA line are consistent with the concept that the negative trend will continue soon. Furthermore, as measured by the stochastic RSI, a growing negative sentiment suggests a sluggish recovery in positive momentum if it occurs. As a result, the negative trend will persist for the foreseeable future, indicating that potential buyers of ADA should proceed with care.
ADA/USD 4-hour price chart (source: TradingView)
The Keltner Channel bands on the 1-day price chart continue to slide southward, with the upper band at 0.412 and the lower band at 0.332. This motion puts negative sentiment at the helm of the market. Indications of price movement going towards the middle band point to waning negative momentum and the possibility of an upward reversal. In this case, a trader may want to consider going long when price action moves back above the middle band and towards the upper band, which may signal a return to bullish sentiment.
However, with a value of 0.004, the MACD line has moved below its signal line and momentum to the south, indicating that a negative rate is still there in the market and that any retreat is likely to be short-lived. The histogram’s downward slope, shown by red bars below the zero line, supports this pessimistic interpretation. Consequentially, the market’s mood signals that although a short-term retreat is probable, the negative momentum is still strong, and traders should approach long positions with care.
With a reading of 8.29 and a cross above the signal line on the stochastic RSI, negative momentum is waning, and a turnaround may be on the horizon. Bears may grow fatigued at this level (oversold), and bulls will likely seize control of the ADA market.
ADA/USD 24-hour price chart (source: TradingView)
Although the update may boost interest in the ADA market, technical indications warn traders to invest cautiously.
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