The price of Cardano (ADA) is down over 3% on June 19 after dropping over 30% in the past two weeks. Is ADA’s price heading for its fourth red weekly candle in a row?
No respite for Cardano price bulls
On June 19, ADA’s price fell over 3% to daily lows of $0.257 as traders continued to assess Cardano’s mention in the list of crypto assets that the U.S. Securities and Exchange Commission considers “unregistered securities.”
In addition, Federal Reserve’s hawkish guidance last week didn’t help ADA price either, with another 50 basis points hike now likely in 2023. Higher rates typically decrease investors’ appetite for risk assets, such as Cardano.
Meanwhile, open interest in ADA-linked derivatives has dropped to around $111 million, the lowest since January 2021.
The past 24 hours have witnessed liquidations worth around $360,000, with long positions losing the most at $341,320. In other words, more bullish traders have closed their positions by selling ADA, which likely added to the downward pressure on June 19.
Furthermore, ADA’s intraday price decline on June 19 coincided with the 0.15% rise in the U.S. Dollar Index (DXY). These inverse moves may break their daily positive correlation coefficient in the coming days from the current yearly high of 0.82.
In other words, ADA may keep declining if the dollar rises in June, now that the latter has entered the rebound stage inside its prevailing symmetrical triangle pattern.
ADA bullish vs. bearish scenarios
Bullish Cardano traders showed resilience to the SEC crackdown two weeks ago, confirmed by a bullish rejection candlestick on June 5.
ADA’s price has risen more than 15% since but remains “oversold” with the daily relative strength index (RSI) below 30.
These technical indicators hint at a possible extended ADA consolidation or recovery period ahead.
Moreover, a descending triangle can come into play if this bullish scenario plays out. This up-move will present a target of $0.30 over the next few weeks, up 16.5% from the current price levels.
Conversely, a descending triangle breakdown scenario will likely result in a 12% decline toward $0.226 — a potentially significant area of support — in the next few weeks.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.