Cardano price sealed in downtrend as ADA buyers are nowhere to be found

Cardano price could continue to trend lower as the token is sealed within a consolidation pattern.
A technical indicator suggests that there is a significant increase in ADA sellers.
Cardano is at risk of a 36% decline if the Ethereum killer falls below $1.00.

Cardano price could continue its downtrend within the prevailing chart pattern as the bears engage in a sell-off. A technical indicator has flashed a local top signal, also suggesting that the momentum has flipped to the downside.

Cardano price prints consolidation pattern

Cardano price has formed a descending parallel channel on the daily chart, as ADA has consistently recorded lower highs and lower lows.

The Arms Index (TRIN), which gauges overall market sentiment suggests that there is a significant uptick in sellers than buyers, indicating a sell-off.

The Momentum Reversal Indicator (MRI) has flashed a local top signal on the January 20 candle, adding credence to the bearish narrative.

The first line of defense for Cardano price is at the June 23 low at $1.10. If selling pressure continues to increase, ADA may test the lower boundary of the governing technical pattern at $1.00 as a level of support.

Investors should note that if Cardano price drops below the aforementioned foothold, a 36% decline toward $0.64 would be put on the radar, a bearish target given by the prevailing chart pattern.

ADA will discover two support levels at the February 22 low at $0.81, then at the February 8 high at $0.72 before Cardano price falls toward the bearish target at $0.64.

ADA/USDT daily chart

However, if the bulls manage to reverse the period of underperformance, Cardano price will face resistance at $1.28, where the 21-day Simple Moving Average (SMA), 50-day SMA and middle boundary of the governing technical pattern meet.

A spike in buy orders may see the bulls push Cardano price higher toward the upper boundary of the prevailing chart pattern at $1.61, coinciding with the 100-day SMA.

Share: Cryptos feed

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.