Cardano Stalls After Midnight Launch – Can ADA Maintain $0.405?

The recently launched Midnight’s [NIGHT] native token has intersected with a time when Cardano holders are experiencing significant losses. These losses have created what some are calling an “extreme buy” opportunity for Cardano, with hopes for a rally tied to the Midnight sidechain launch.

Key Takeaways

The Midnight launch of the NIGHT token coincided with Cardano's struggle amidst significant losses.
ADA token prices rose to $0.484 before stalling, with resistance at $0.52.
Indicators show potential for continued downtrend if key support levels ($0.405 and $0.37) are broken.
There exists a bullish opportunity suggested by liquidation heatmaps, but market conditions remain uncertain.
Traders should prepare for possible bearish trends, watching for crucial price points to act upon.

Cardano at a crossroad- Hold $0.405 or resume the downtrend

A week leading up to the December 8th launch saw Cardano [ADA] token prices begin to rise from $0.37. By December 9th, prices reached a notable increase of 30.6%, climbing to $0.484. Unfortunately, the rally has since faced a setback.

The failure of buyers to maintain momentum and reclaim the long-term resistance level of $0.52 suggests that the bullish pressure may not be as strong as anticipated.

Indicators Suggesting Downtrend for Cardano

Cardano 1-day Chart

Source: ADA/USDT on TradingView

The analysis on the 1-day chart indicates that the swing low at $0.405 is currently under pressure from sellers. If prices close daily below this critical level, it could lead to a bearish shift in momentum.

Further support can be found at the $0.37 mark, and failing to hold either of these two levels could signal a continued downtrend.

The Chaikin Money Flow (CMF) has shown an increase in selling pressure, dipping below -0.05. This trend aligns with significant capital outflows that have been observed since the crash on October 10th. Overall, the daily indicators are reinforcing the presence of a bearish trend.

Cardano: An Argument for Bullish Potential

Cardano Liquidation Heatmap

Source: CoinGlass

The 1-month Liquidation Heatmap indicates a build-up of short liquidations above the recent swing high of $0.48. This area is critical as it may attract prices upward, similar to earlier movements this month.

While there is not much liquidity between $0.4 and $0.5, the range of $0.43-$0.44 could act as an obstacle to any quick price rally.

Traders’ Strategy: Prepare for Potential Bearish Trends

Current daily price actions suggest that the overall trend remains bullish. However, technical indicators, combined with recent Bitcoin [BTC] volatility, have given little support to ADA bulls.

Additionally, the rally that peaked at $0.48 did not show resistance at the $0.45 or $0.43 levels, indicating a troubling lack of buying interest, as confirmed by the CMF.

As a result, traders should be alert for potential drops below $0.405. A decline and subsequent retest of this level as resistance may present an advantageous selling opportunity.

Conclusion

Disclaimer: The information provided herein does not represent financial, investment, trading, or other forms of advice and reflects only the author’s viewpoint.