- Cardano price action drops over 1% in European trading this Wednesday.
- ADA price sees its gains from Tuesday almost fully pared back.
- The risk is that a new low will be printed this week, this month and possibly this year.
Cardano price is currently down over 1% for the day as traders cut their positions and take their gains out of fear price action could collapse anytime soon. A little bit of dollar strength is driving investors away from cryptocurrencies and sees almost every asset class paring back on its moves from Monday and Tuesday. There is a risk of a continuation of this move as bears have probably used the rally from the past few days as a pullback from which to enter large positions.
ADA price is at risk of slipping below $0.40
Cardano price action has been trading on a slither of hope these past few days as markets and several assets started to forget they were in a bear market. That sentiment, however, did not last very long as the dollar’s gains this morning scared traders away quicker than some first-grade kids out of a haunted house at a funfair. The exodus has started, and bears love the opportunities and levels they offer to enter and run price action into the ground.
ADA price is thus set to pare back this week’s rally and flirt with $0.416. That level is the low of Monday and the past three months. Should that level give way – which it probably will as it does not hold any historic supportive relevance – the chances will increase of a drop lower towards $0.388 developing, and following that, price printing a new low for 2022 as the May low will likely break during the test.
ADA/USD Daily chart
Alternatively, given the price action on Tuesday saw a break higher, bears might have lost their appetite to push the market down, as markets are starting to get accustomed to the current tail risks, and most are being priced in for now. As such, another tick higher could be on the cards, with $0.461 and $0.470 as potential caps to the upside. The first is the monthly pivot, and the second is the 55-day Simple Moving Average.