The ADA price has run into resistance as it fights to reclaim the psychological $2.0000 level. An important trend may now decide the fate of the recovery.
It’s fair to say that the month of May has been volatile for Cardano. maybe even more so than many of its peers.
Like Bitcoin, ADA set a new record in April. However, as Bitcoin struggled to hold onto the gains, the ADA price cleared its previous $1.5600 All-time high a month later.
The coin blew through April’s peak, eventually topping out on the 16th of May, 91% higher at $2.5100.
ADA Price Crash
It was always unlikely that the rally could sustain its rate of ascent. The relative strength indicator was showing signs of stress. At the peak, the RSI reading of 74.40 was pointing to overbought conditions.
In fact, the ADA price had started to pull back even ahead of Wednesday’s epic meltdown. Coming into the mid-week session, Cardano was already lower from the high by 20% to $2.000.
During Wednesday’s crash, ADA lost more than half its value and traded as low as $0.9180 before recovering to finish the day at $1.4675.
Yesterday the bounce continued, only to falter sat $1.9855, just short of the key $2.00 mark.
ADA Technical Analysis
The recovery took the price above the resistance of an ascending trend line at $1.7300, in place from the May high.
The momentum gathered pace once ADA crossed the line, only to fail at the horizontal resistance of the April high.
The ADA price is now back at its previous breakout level, and what happens next will be key to its continued recovery.
If the price should break back below the trend, it may signal that the recent jump was nothing more than a relief rally. This could see the coin trade lower to the support of the 13th of April low at $1.4475.
However, if ADA can stay above the trend, it can go on to take another look at yesterday’s high. If the momentum can clear the $2.00 barrier, there is a possibility the ADA price can go higher still.
In this instance I would not rule out the possibility of new highs.