Cardano loses ground within the confines of a descending parallel channel.
The recovery from $2 support is a daunting task for the bulls, especially with the resistance highlighted by the IOMAP metric.
Cardano continues to bite into the key support at $2 amid a highly challenging recovery journey. In early September, ADA climbed above $3 and traded an all-time high at $3.1. The correction that comes into the picture has not slowed down since, forcing the recently upgraded token to stay closer to the primary support.
At writing, ADA trades at $2.15 while dealing with growing selling pressure at the descending channel’s upper boundary. This pattern has been in place since Cardano retreated from $3.1. If broken, the third-largest cryptocurrency might find new lifeblood for gains toward $2.5 and later $3.
Cardano Price Recovery To $3 In Jeopardy
From a short-term technical perspective, it is clear that buyers are having considerable difficulty sustaining the uptrend. On the downside, the smart contract token is in danger of dropping under the demand zone in green, a move that could trigger massive losses. If support at $2 is lost, panic will grip investors while lower levels like $2 and $1 beckon.
Traders must keep in mind that the Moving Average Convergence Divergence (MACD) has a bearish outlook based on its position below the mean line on the daily chart. A sell signal from early September has been sustained and continues to encourage sellers to increase their positions.
The Relative Strength Index (RSI) adds credence to the ongoing downtrend. Its position below the midline emphasizes the bearish grip on ADA.
ADA/USD Daily Chart
ADA/USD price chart by Tradingview
Similarly, the channel’s middle boundary is a key support line that must be defended if Cardano wants to close the gap to the supply zone in red. Otherwise, the least resistance path would keep to the south.
Meanwhile, data by IntoTheBlock suggests that sellers have the upper hand. The IOMAP model highlights immense resistance at $2.23 and $2.44. Cracking these zones will not be easy because investors will be trying to break even, thus reducing the effectiveness of the tail force.
Cardano IOMAP Model
Cardano IOMAP chart by IntoTheBlock
On the downside, Cardano is sitting on top of relatively weak support areas, which means with a slight push, the token will start exploring the levels below $2.
Cardano Intraday Levels
Spot rate: $2.15
Trend: Short-bearish bias
Resistance: $2.23 and $2.44
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