ADA price has corrected from its all-time high of $2.95 and faces new pressure that might push it further below $2.60
The price of Cardano rallied almost 105% in the past 30 days, and by over 44% in the past two weeks, data from CoinGecko shows.
The cryptocurrency's value surged from lows of $1.26 in late July to come close to breaking above $3. ADA price even reached a new all-time high of $2.95 on 23 August amid anticipation of smart contracts on the Cardano network, expected to go live on the mainnet on 12 September 2021.
But while Cardano's price remains in an uptrend and a retest of the recent peak is more likely, bulls have faced increased pressure over the past two days and a move lower is very possible.
ADA price poised above $2.60
The downside from $2.95 to lows of $2.46 coincided with the Cardano Foundation's announcement on 24 August of a partnership with blockchain analytics firm Confirm. The deal is meant to see Cardano work with the analytics company to enhance compliance with anti-money laundering (AML) requirements, with providers such as exchanges and custodians being able to track ADA use from their wallets.
The move has drawn some sharp criticism from across the crypto market, with Weiss Crypto comparing it to the same moves that have "choked" the banking system.
https://twitter.com/WeissCrypto/status/1430548479324172298
ADA/USD daily chart. Source: TradingView
The negative sentiment threatens to push ADA lower, with bears testing the 16 May peak of $2.46. Bulls are looking to bounce off the support level, and a successful break above $2.65 would invite more bids towards $3.
The RSI still trends with overbought conditions and the MACD sports a bullish outlook above the signal line. However, both indicators are suggesting a possible flip in the short term, a move likely to aid the bears.
If sellers refuse to cede ground near $2.60, it might result in fresh selling pressure for ADA/USD and push prices lower. In this case, bulls could rely on support at the horizontal line around $2.31. Any more downside correction could result in a move past the psychological $2 level, with ADA price likely to seek support around $1.88.