The Cardano price was trading at $0.506 as of 7:30 am EST, down 3% over the last 24 hours.
The smart contracts token has increased significantly following a sharp fall toward the end of last year. While it was an expected course of action for the crypto market after a two-month-long uptrend, current circumstances dictate that the ADA may not have completely shaken off the bearishness even though ADA has room for growth.
Meanwhile, the market awaits the Securities and Exchange Commission’s (SEC) decision on spot Bitcoin ETF application later on Jan. 10. It is expected that if one or several of these ETFs, it may lead to an uptick in BTC price with altcoins like ADA growing as well.
Are Cardano bulls strong enough to initiate a recovery?
Cardano price can be seen trading in a second straight bearish session on the daily chart, almost undoing all the gains made on Jan. 8.
The layer 1 token exhibits the potential to continue its long-term downtrend that began in mid-December, as the third-generation cryptocurrency has lost the support of the 50-day Exponential Moving Average (EMA), currently sitting at $0.522.
Additionally, the rising channel’s resistance line has sustained as resistance, preventing the altcoin from rising above $0.55, attained from the double bottom pattern noted in the chart.
Despite the correction, this target price can be reclaimed again as it stands 12% away from the current price.
ADA/USD Daily Chart
However, price indicators, especially the relative strength index (RSI) are exhibiting the first bearish signal in nearly three months. The bearish crossover that occurred when the RSI crossed the midline into the negative territory and the potential bearish impact of funds flowing into Bitcoin following the spot BTC ETF approval could take ADA further down.
A revisit of the $0.46 is the likely outcome since the 100-day EMA coincides with this price, but prolonged bearishness could drag ADA lower to $0.399 to coincide with the 200-day EMA.
On the downside, if Cardano price bounces off the $0.46 support line and reclaims the resistance at $0.50, embraced by the upper boundary of the rising channel, it might have a shot at rising toward the 50-day EMA at $0.522.
For the same, the $0.55 level must be flipped into support, which would invalidate the bearish thesis.