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  • Cardano price wedges higher under May’s declining trend line.
  • ADA 200 twelve-hour simple moving average (SMA) bolsters the support around 2018 high.
  • According to the IntoTheBlock Ownership by Time Held data, Cardano owners of at least a year now only represent 8% of the total ownership.

Cardano price resolved a symmetrical triangle to the downside on June 11 and has wedged calmly higher, discovering resistance at the declining 50 twelve-hour SMA. 2018 high is critical support on weakness and is the only significant obstacle between ADA and a test of the May 19 low. The outlook is aligned with caution until there is a declaration of intentions by the green token.    

Cardano price is indecisive while technicals continue to converge    

Today, ADA is the 5th largest cryptocurrency with a market capitalization of $49.56 billion, sandwiched between Binance Coin and Dogecoin. The decentralized, proof-of-stake (PoS) blockchain competes with Ethereum, and NBC categorized Cardano as the “most significant proof of stake cryptocurrency on the market.”  

Critical to maintaining the high ranking has been the patrolling support of the 2018 high at $1.40. Cardano price struggled with the $1.40 price level in February, March and April, emphasizing its importance in the months heading into the May blast off.  

Now $1.40 has turned from resistance to support since the end of May, and the 200 twelve-hour moving average reinforces it at $1.41. A daily close below the June 11 low of $1.35 will be the initial sign to ADA investors that Cardano price is readying to target lower prices. A further close below the May 29 low of $1.33 will be the final confirmation of a bearish outlook for the altcoin.

Below $1.33, Cardano price is in a vacuum until the May 23 low at $1.04. A more likely scenario is for ADA to briefly sweep the May 19 low at $0.978 before rebounding from around the January 3 anchored volume-weighted average price (anchored VWAP) at $0.975. A test of the anchored VWAP would reward bearish ADA investors with a profit of 28% from the June 8 low.

If the bids pile up, Cardano price could sweep the April 22 low at $0.909.

ADA/USD 12-hour chart

ADA/USD 12-hour chart

It will take a twelve-hour close above $1.61 to change the mildly bearish  outlook. The price level clears the intersection of May’s declining trend line, the triangle’s lower trend line and the 50 twelve-hour SMA. Moreover, a successful close above $1.61 could propel Cardano price to the triangle’s upper trend line at $1.83.  

In June 2020, hodlers (held ADA > 12 months) represented 52.82% of the ADA ownership, according to IntoTheBlock. Today, hodlers represent just 8.22% of the ownership. Despite the glowing interest in the major media, there has been a steady decline in hodler ownership, reflecting a deterioration of conviction in the digital asset.

Today, almost 92% of the ADA ownership has held the altcoin for less than a year, and 33.06% have owned it less than a month. As a result, Cardano price is directed by the actions of short-term traders, lending more volatility and no clear trends, particularly to the upside.

To be blunt, Cardano price is not supported by a group of committed investors, and if there is a clear break below $1.40, a stampede for the exits may occur.

ADA Ownership by Time Held - IntoTheBlock

ADA Ownership by Time Held – IntoTheBlock

ADA may do things more mature and responsible, but investors do not seem committed to the vision. It is a bend-or-break moment for Cardano price, and $1.40 is crucial in deciding what trend direction wins.