cardano The price of .
It made a modest jump after losing nearly 30% of its value the previous week, the worst seven-day performance since May 2021, when Terra’s collapse led to a crash in the cryptocurrency market.
However, according to technical analysis, ADA looks set to experience a sharp recovery in the coming months.
ADA Price Up 30% From Six-Month Low
On June 12, the ADA price rose 2.25% to $0.28, up nearly 27% from the six-month low of $0.22 seen last week. The rally came along with gains elsewhere in the crypto market. He pointed out that investors were buying the dip.
Among the reasons behind Cardano’s bad week is that the US Securities and Exchange Commission (SEC) considers it an unregistered security in lawsuits against crypto exchanges Binance and Coinbase.
On June 9, users cryptocurrency Robinhood, the US-based investment service that allows traders to trade, has announced that it will remove ADA from its platform. Prior to this, the ADA price dropped by up to 30% during the day.
Cardano was also part of the services offered by crypto exchange Crypto.com to its US-based corporate clients. The company terminated these services on June 9, limiting ADA to its potential mainstream investor base in the US.
Cardano Becomes Top-Selling Product Since March 2020
However Altcoins‘s technical data point to a possible recovery in the future. For example, the continued token recovery comes a day after its daily relative strength (RSI) dropped to 20, the most oversold since March 2020.
Oversold RSI readings typically precede a consolidating or rebounding price move.
For example, the ADA price had increased 900% four months after the oversold readings in March 2020. This was also due to the Federal Reserve’s quantitative easing policy, which boosted upside sentiment in risky markets.
However, the Fed is poised to continue raising interest rates as inflation continues. This will eliminate excess cash in the market. In addition, the SEC’s crypto pressure has created unfavorable market conditions for cryptocurrency tokens like ADA in the United States.
Therefore, an oversold recovery, if it happens, could be weaker than what the market witnessed after March 2020.
On the three-day chart, ADA is in the $0.247-$0.382 range, similar to the price trends in January 2021 and January 2023 as shown below.
Therefore, a recovery from the $0.247 support could start an uptrend towards $0.382 by October 2023. The resistance at $0.382, which is up 40% from current levels, also coincides with the 200-3D EMA (red wave).
Conversely, a decisive close below the $0.247 support would give the bears more fuel to push the price down by around 30% to $0.19 by October 2023, when the price turns into resistance-support from the July 2020-December 2020 session.
You can find the current market movements here.