Cardano (ADA) has recently experienced a significant decline, breaking below a critical support level that had previously held firm through three major cycles. Analyst Ali Martinez highlighted this support zone as the foundation for three key ADA rebounds in 2024. However, the latest price action has disrupted this trend. Currently, ADA is trading at $0.472, a sharp departure from previous recoveries.
Historically, ADA had rebounded from this support zone multiple times. The first significant bounce occurred in April, when the price surged by nearly 60%. Another rebound followed in June, with ADA climbing by around 80%. A third retest in July saw another rally, confirming this zone as a reliable support level. However, recent market conditions have seen ADA break below this critical level, suggesting that it may be vulnerable to further declines, with analysts like Ali Martinez predicting a potential drop to $0.40.
Bollinger Bands and Oversold Indicators Signal Potential Price Bounce
According to technical indicators, ADA’s price remains below the middle Bollinger Band (20 SMA), currently sitting around $0.5577. The lower band is positioned at $0.4701, showing that the cryptocurrency may be in an oversold condition.
Typically, when an asset trades near or below the lower Bollinger Band, it could indicate a potential reversal or price bounce.
The Stochastic RSI, a momentum oscillator, further supports this idea, with its %K and %D lines at 15.79 and 11.23, well below the oversold threshold of 20. This suggests that bearish momentum might be nearing exhaustion.
However, any potential upward movement could face resistance near the $0.55–$0.56 region, aligning with the middle Bollinger Band.
What’s Next for Cardano?
With ADA hovering near the lower Bollinger Band and showing signs of oversold conditions, there could be room for a short-term relief rally. However, the broader trend is uncertain as ADA has broken its previous support levels.
If the price fails to regain momentum, Cardano may see further downside, with the next potential support around the $0.40 level.
While the market continues to react to this shift, investors and analysts will likely monitor how Cardano performs at these lower levels, with many watching the $0.30 support as a possible zone for a rebound.