Cardano (ADA) Price: Network Activity Plummets as Crucial Support Level Tested

TLDR:

Cardano price hovers around key support at $0.72, risking correction if broken On-chain metrics show declining daily active addresses and DEX volume Technical indicators suggest weakening momentum with RSI below 50 Price faces resistance at $0.760 with a bearish trend line ADA could fall 12% to $0.64 if support breaks, or rally toward $0.80 if resistance cleared

---

Cardano (ADA) is showing signs of weakness as it tests critical support levels. The cryptocurrency is currently trading around $0.73, hovering near its key support at $0.72. A decisive close below this level could trigger a notable correction.

The price action comes after ADA faced rejection around the daily resistance at $0.84 on May 13, declining 10% over the following four days. This resistance level coincides with the 50% Fibonacci retracement level drawn from the March 3 high of $1.17 to the April 7 low of $0.51.

Cardano has retested and found support around its 200-day Exponential Moving Average (EMA) at $0.71. However, the cryptocurrency’s momentum indicators are displaying bearish signals.

The Relative Strength Index (RSI) on the daily chart reads 49, slipping below the neutral level of 50. This indicates increasing bearish momentum. Similarly, the Moving Average Convergence Divergence (MACD) indicator showed a bearish crossover on Sunday, giving a selling signal.

Cardano (ADA) Price

On-Chain Metrics Point Downward

On-chain data further supports the bearish outlook. Santiment’s Daily Active Addresses index, which tracks network activity over time, shows a concerning trend for Cardano.

Daily Active Addresses fell to 23,644 on Tuesday from 35,696 on May 14. This extends a downtrend that started in early March, indicating decreased demand for ADA’s blockchain usage.

Additionally, data from DefiLlama reveals that Cardano’s chain DEX trading volume has consistently fallen since early December. The current reading is $3.06 million on Tuesday. This decline in volume signals reduced user activity and liquidity in the ADA blockchain.

If ADA breaks and closes below the 200-day EMA at $0.71 on a daily basis, it could extend the decline by 12% from its current levels to retest its May 6 low of $0.64.

Short-Term Recovery Potential

Despite the bearish indicators, Cardano has shown some resilience in recent days. The price started a fresh increase above the $0.7250 zone and is now trading above $0.740 and the 100-hourly simple moving average.

There is, however, a key bearish trend line forming with resistance at $0.7580 on the hourly chart. The price might face resistance near this zone on the upside.

If Cardano finds support around the 200-day EMA and recovers, it could extend the recovery to retest its daily resistance. The first resistance is near $0.760, followed by $0.7720. A successful break above $0.7720 could start a strong rally, potentially pushing the price toward the $0.80 region.

On the downside, immediate support is near $0.7420, with the next major support at $0.7260. A break below $0.7260 could open the doors for a test of $0.710, with further support at $0.680.

Cardano’s price movements in the coming days will likely depend on whether it can maintain support above the critical $0.71-$0.72 range. The cryptocurrency last traded at $0.73 on Tuesday.

The post Cardano (ADA) Price: Network Activity Plummets as Crucial Support Level Tested appeared first on CoinCentral.