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▲ Cardano (ADA)/ChatGPT generated image
Cardano (ADA) has shown a buy signal on its daily chart, but the market is not yet reassured. Although a rebound occurred after hitting a low of $0.138, a warning has been issued that if it fails to surpass the $0.16 to $0.176 range, it could end up as a bull trap.
According to the cryptocurrency specialized media The Crypto Basic on June 26 (local time), the Tom Demark Sequential indicator on Cardano's daily chart sent a buy signal. This indicator marks trend exhaustion points from 1 to 9, identifying potential price reversals. Generally, the 9th bar is interpreted as a zone where the existing trend may end.
This signal appeared after Cardano fell to $0.138 during the trading session. Cardano had dropped approximately 10% over three consecutive days. Subsequently, it rebounded by about 6% to $0.1454, increasing the possibility of a short-term retracement.
However, the Cardano ecosystem recently experienced the aftermath of a hack. SecondFi, a Cardano-based wallet protocol, suffered a loss of 16 million ADA, approximately $2.4 million, from 374 wallets due to a security breach. SlowMist estimated the total damage at approximately 129 million ADA, or about $20 million.
On-chain metrics also supported the possibility of a rebound. According to Santiment, Cardano's active addresses increased to 29,025. Social dominance rose to 0.33%. Santiment explained that in two previous similar trends this year, Cardano overcame selling pressure and showed significant recovery.
The issue, however, is the quality of the rebound. The broader market trend remains bearish. If Cardano fails to break through the resistance range of $0.16 to $0.176, this rebound could merely be a temporary relief rally before further declines. Conversely, if it surpasses this range and recovers to $0.19, the previous high within the low range formed in early June, it opens up the possibility of forming a durable bottom.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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