Over the past few months, Cardano’s price performance has been underwhelming. The asset has lost more than 25% of its value since November and has yet to regain its previous strength before the FTX disaster. Meanwhile, recent progress might be a sign of things to come.
In the past 16 days, after regaining about 5% in value from the local low, Cardano overcame the first short-term resistance level in the form of the 21-day moving average, which frequently serves as the initial barrier for an asset moving in a protracted downturn.
The 50-day moving average will act as the next resistance level and will likely be reached by ADA if the breakout is successful. A breakthrough would greatly increase the likelihood of a trend reversal.
Additionally, investors should look for falling volume profiles, which signify waning trends. Declining volume often indicates that traders and investors are unable or unwilling to continue applying selling pressure to bring down the price of an asset.
According to profitability metrics, Cardano has been substantially oversold for months. For the bears to keep up the pace, they will need to locate more funds for their shorting operation, which could be difficult during the market rebound for all cryptocurrencies.