Cardano (ADA) Rises 12% But Momentum Weakens
2min read Cardano (ADA) has seen a significant price recovery, rising more than 12% over the past week and trading above $0.70 for the first time since late March. Despite this positive movement, technical indicators suggest that the momentum behind ADA's price increase is weakening. The Bollinger Band Trend (BBTrend) indicator, which measures the strength of a price trend, has dropped from 13.27 to 7.55 over the past three days. This decline indicates that while ADA has been moving higher, the underlying momentum of this expansion is losing intensity.
This shift highlights a potential slowdown that could impact ADA's ability to sustain further gains without renewed buying pressure. The BBTrend indicator, which measures the strength of a price trend based on the expansion or contraction of Bollinger Bands, typically signals strong momentum and increasing volatility when rising. Conversely, a falling BBTrend suggests weakening momentum or the start of a consolidation phase. With ADA’s BBTrend now at 7.55, the indicator still points to some positive momentum, but at a much weaker pace than earlier in the week. If the BBTrend continues to decline, ADA could enter a consolidation phase, but if buying pressure returns, the token could extend its current positive streak.
Additionally, the Directional Movement Index (DMI) for Cardano shows that the Average Directional Index (ADX) has dropped to 17.14 from 31 two days ago. This sharp decrease signals that the strength of ADA’s recent trend has weakened significantly. The +DI (positive directional indicator) is at 19.95, up from 15.96 a few hours ago but still down from 26 two days ago. The -DI (negative directional indicator) sits at 19.07, slightly down from 21.16 earlier but up compared to 14.49 two days ago, reflecting mixed momentum between buyers and sellers. The ADX measures the strength of a trend without indicating its direction. Readings above 25 typically suggest a strong trend, while readings below 20 point to a weak or consolidating market. With ADA’s ADX now at 17.14, trend strength is weak, and neither buyers nor sellers currently have a clear advantage. The close values between +DI and -DI suggest that Cardano could enter a period of sideways movement unless either bulls or bears regain stronger control soon.
Ask Aime: Is Cardano's price recovery weakening its momentum?
Cardano’s Exponential Moving Average (EMA) lines suggest an uptrend, with the short-term EMAs positioned above the long-term ones. However, the price has repeatedly tested the support level at $0.69 and is trading very close to it. This price action signals that while the broader trend remains positive, the bullish momentum has weakened, and the $0.69 support is becoming a critical zone. If ADA loses the $0.69 support, the next downside targets would be around $0.63, followed by $0.609 and potentially $0.59 if selling pressure accelerates. On the other hand, if buyers step back in and reinforce the uptrend, ADA could rally to retest resistance at $0.746. A breakout above $0.746 could open the door for a move toward $0.77, offering a strong bullish setup if momentum strengthens again.
In summary, while Cardano (ADA) has shown resilience with a 12% price increase over the past week, technical indicators suggest that the momentum behind this rally is weakening. The BBTrend and DMI indicators point to a potential slowdown and a period of indecision as buyers and sellers battle for control. The $0.69 support level is critical, and a break below this level could lead to further downside. Conversely, a strong rebound could see ADA retest resistance at $0.746 and potentially move toward $0.77. Investors should closely monitor these levels and the overall market sentiment to make informed decisions.
