Cardano (ADA) recently flipped the initial resistance level at $0.16 to a support area on the 4-hour chart, and is trading at $0.1651 at press time. While this structural swap indicates bullish momentum, one analyst notes that the Relative Strength Index (RSI) is lagging, which could cause the coin to retest its lower resistance ($0.16).
Cardano (ADA) near-term price forecast
According to Nick Valdez, ADA’s short-term bullish momentum may hit a barrier with the RSI stalling around the mid-40s. This usually indicates the exhaustion of the buying pressure necessary to push the price to a vertical breakout. It can also indicate a possible search for liquidity or that the market needs to consolidate when combined with a price above a support level.
For this reason, Valdez believes that ADA could drift slightly lower to test the strength of the lower trend line and eliminate weak hands. If buyers step in to defend this lower support, the analyst expects a price bounce that would validate the support area as a new baseline.
What’s more, if this defensive structure holds, it could pave the way for a rally towards the upper resistance area at $0.20 that was established earlier this month.
source: X
Recent developments
On July 15, ADA whales It has reached its highest level in several years, or about 67% of total circulating supply. While this supports bullish technical patterns, the coin is still showing overbought signals and resulting price stagnation between $0.14 and $0.20 last month.
source: CoinMarketCap
Apart from this, Volvo Group has joined the Cardano Foundation in discussions regarding the use of blockchain in supply chain management.
What to watch for
Currently, traders should continuously monitor the closing of the 4-hour candles relative to the trend line. They should also be careful of connecting to the Relative Strength Index (RSI) line, which may indicate an influx of buyers, high demand, and a potential uptrend.
Additionally, the launch of the Leios upgrade in November could boost productivity, which could lead to increased demand for and adoption of ADA. The market is also anticipating Cardano ETF approvals at the end of the year.
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