Cardano Slips Into Bear Market, DeFi and NFT Sectors Tank

Cardano's recent dip below $0.45 has established a bearish market structure, with resistance present overhead. DeFi and NFT sectors have declined, user activity is decreasing, and the range between $0.45 and $0.685 is under threat. AMBCrypto predicts a continuation of the bearish trend, with a range formation around $0.5 likely in the short term.

Cardano Faces Bearish Market Structure, Devalues DeFi and NFT Sectors

Cardano (ADA), a prominent cryptocurrency platform, has slipped into a bearish market structure after recently breaching the $0.45 support level. This development has sparked concerns among investors as it suggests a potential downward trajectory for the asset.

According to a report by AMBCrypto, Cardano's DeFi and NFT sectors have experienced a decline in value over the past month. This has been accompanied by a downturn in user activity, providing further evidence of the asset's current bearish sentiment.

The crypto asset has established a trading range between $0.45 and $0.685. However, the recent bearish pressure has pushed the price closer to the lower bound of this range.

Technical analysis reveals that the $0.568 level, which represents both the mid-range value and a previous support level, is now acting as a formidable resistance point. Until this resistance is overcome, the bulls in the market will face significant challenges in regaining control.

Furthermore, the presence of a fair value gap and mid-range combination intensifies the resistance faced by buyers. This technical pattern often indicates a strong selling pressure, suggesting that the asset may continue its downward trend.

On the one-day chart, the range formation over the past five months is clearly evident. However, the price's recent fall below the $0.568 support level has extinguished hopes of a bullish reversal in the near term.

The Relative Strength Index (RSI), an indicator used to measure momentum, has remained below the neutral 50 level for approximately six weeks. This signals a sustained downward momentum in the market.

Additionally, the On-Balance Volume (OBV) has recently breached a key support level, indicating a significant increase in selling pressure.

Considering these factors, the Cardano price prediction lean towards a further decline. The $0.40 level is expected to serve as a crucial demand zone, providing potential support to the asset's price.

A liquidation heatmap analysis suggests that the $0.483 and $0.527 levels are the next areas of interest for potential trading activity. With the liquidity at $0.45 now depleted, a move towards the $0.50-$0.52 region appears likely.

On the downside, the $0.41 level also exhibits a substantial concentration of liquidation levels. Consequently, the $0.41-$0.51 range is anticipated to define the trading boundaries for Cardano in the coming week.