Despite its widespread popularity and technological advancements, Cardano (ADA) has not been able to avoid the downward trend affecting the overall cryptocurrency markets at the end of the first week of July.
The token has surprised many by defying technical analysis with its recent decline, as it had appeared to be forming a falling wedge breakout pattern earlier in the month. This led to expectations of a potential 70% rally for Cardano in the near future.
However, despite a brief rally that saw the cryptocurrency reach nearly $0.42 on July 3, ADA quickly experienced a sharp decline, dropping to lows of $0.3211 on July 5. Although it fell below its immediate support zone near $0.35, Cardano managed to avoid a free fall by staying above the second support level and has since recovered to $0.34459 at the time of writing.
Nevertheless, the token remains in a precarious position due to the strong downtrend seen across the crypto markets, which has led to significant declines in multiple other coins and tokens in recent days.
The question remains: is Cardano poised for a rally or will it experience further decline? The bearish sentiment is supported by Cardano’s performance over the past few weeks, with only 12 green days out of the last 30 and trading well below its 200-day simple moving average of $0.536241.
While other major cryptocurrencies like Bitcoin managed to stay relatively stable after their March highs, ADA struggled to maintain its position near the $0.77 yearly highs and consistently remained below $0.50 by mid-April.
However, despite these challenges, Cardano’s technical advancements and positive statistics provide a more bullish outlook. The network recently released a new node and a new lace version, and the number of smart contracts on the Plutus network has exceeded 62,000.
Even in a more bullish scenario, Cardano is unlikely to surpass $0.40 in the near future unless it can overcome the resistance level near $0.39. If successful, it may reclaim prices above $0.50, especially if the broader trends in the crypto markets take a positive turn.
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