Cardano Price Analysis: ADA/USD breaks below important support, more sell-off ahead
|- Cardano (ADA) is poised for further sell-off after a move below daily SMA50.
- A sustainable move above this barrier will negate the bearish scenario.
Cardano (ADA) is the 12th largest digital asset with the current market capitalization of $2.63 billion and an average daily trading volume of $385 million. At the time of writing, ADA/USD is changing hands at $0.1073, down over 4% on a day-to-day basis.
ADA/USD: The technical picture
On the daily chart, ADA broke below the critical support level, created by the psychological level of $0.1100 reinforced by the daily SMA100.
SMA or simple moving average is a popular technical indicator that helps to define an average price during a specified time frame. It is often used by traders as a helpful tool that aids to determine whether the price will reverse or continue moving in the same direction. Usually, SMA serves as a support or resistance that limits or slows down the price momentum. However, once it is passed, the movement may gather pace quickly.
Now that ADA is below the above-said SAM100, the sell-off may gather pace with the next major target created by the SMA200 at $0.0765. This development will bring us to the lowest level since June 2020.
Considering the downside-looking RSI on the daily chart, the further sell-off towards the above-mentioned support of $0.0765 looks likely. However, a sustainable move above $0.1100 will negate the immediate bear case and bring the recovery back on track. In this case, the bullish target of $0.13 will come into focus. This barrier is reinforced by the daily SMA50 that was broken to the downside on August 21.
ADA/USD daily chart
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