Cardano ADA's price shows a bullish structure despite the mayhem caused in late May. ADA price set up a higher low on June 8, followed by a quick upswing, a common theme across the cryptocurrency market.
Lately, this rally has slowed down, indicating the exhaustion of price bullish momentum. ADA might be due for a minor retracement level before the uptrend resumes.
Cardano's price rode the bull wave, rising 16% to a price of $1.638 after a swing low on June 8. As investors begin to book profits, the price rally seems to be coming undone. So far, Cardano's price has dropped roughly 3% from the previous swing high and might continue until it encounters the 50% Fibonacci retracement at $1.50.
A swift return of the bulls at this level seems likely. That said, the outlook for Cardano ADA price will stay bullish up to the 70.5% Fibonacci retracement level at a price of $1.316. Therefore, a dip into the support levels ranging from a price of $1.50 to $1.316 will likely trigger massive buying pressure, pushing ADA price to critical levels at $1.638, $1.741, and $1.848.
In a highly bullish case, Cardano's price might tag the range high at a price of $1.949 or the lower limit of the supply zone extending from $1.977 to $2.084.
While the technicals hint at a drop, the on-chain metrics solidify it. IntoTheBlock’s Global In/Out of the Money model reveals a massive cluster of underwater investors presents ahead.
Roughly 162,000 addresses purchased nearly 2.23 billion Cardano ADA at an average price of $2.01. These “Out of the Money” investors might slow down the price upswing or halt it if they decide to break even and sell their holdings.
Further supporting the retracement level is the lack of users interacting with the Cardano blockchain. The number of new addresses joining the Cardano network has reduced from 63,660 to 38,070 over the past month.
This 40% decline suggests that market participants are reallocating their funds. Both of which paint a short-term bearish picture, adding credence to the pullback thesis.
If Cardano ADA price dips below the 79% Fibonacci retracement level at a price of $1.24, it would invalidate the bullish thesis and open the possibility of a further downswing. A potential spike in selling pressure could push Cardano ADA down by 15% to the range low at $1.051.
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