- Cardano is squeezed between a descending short-term trend line and two support levels.
- Buyers remain in control of price action and are trying to overcome the $2.20 marker.
- Rally still looks solid with more upside to come.
Cardano price (ADA) is still very much in good health and running higher. However, ADA has been forming a downward sloping cap on its price action. Price is getting squeezed with lower highs, but support is not budging and is defending profits made.
ADA bulls defend profits above $1.90 with knives between their teeth
However, price action in Cardano is very choppy and not for the nervous investors who shake with every dip that happens. The monthly R3 resistance level got broken to the upside last week but had to give way after three retests. The psychological $2 level could not be of any service. Thus price action had to look lower for some support.
Buyers flocked in to defend profits and add to their positions at $1.89. A level that formed a double top between May 9 and May 21. That level was a good reason for buyers to push the price back above $2. The squeeze is continuing, however, and it will be essential to see if ADA can move higher and break the ascending red trend line forming a cap for more upside.
ADA/USD daily chart
With the current favorable tailwind in cryptocurrencies fading, expect a retest possible of first the R3 monthly pivot around $2 and next to that supporting level at $1.89. The question is whether buyers will defend that level again or offload their longs above the R3 resistance level.
Any correction further down on a break below that $1.89 could open the door for a violent reaction toward $1.50 as there is not much incentive in the way. Expect sellers to take over and buyers to flee their long positions though if ADA dips below $1.89 for a second time.
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