Cardano Price Analysis: ADA Downside Protected By 20-day SMA

Daily Cardano ADA Price Forecast

Last Updated July 28th 2021
2 Min Read
  • MACD indicates increasing bullish market momentum.
  • The Cardano price has flipped parabolic SAR from negative to positive.

This Monday, the Cardano price jumped up from $1.22 to $1.45, however, the buyers lost steam as ADA retraced to $1.33. Prior to this, Cardano dropped from $1.45 to $1.05 between July 5 and July 20, flipping the 20-day and 200-day SMAs from support to resistance. As per the daily chart, Cardano could have dropped some more if the 20-day SMA hadn’t stayed strong.

Cardano Price Uptrend Blocked By 50-day SMA

Between July 21 and July 26, the Cardano price had five bullish sessions out of the last six, during which it jumped from $1.05 to $1.255. Since then, ADA has dropped down to $1.25. During this rise, Cardano managed to:

  • Flip the 20-day and 200-day SMAs from resistance to support.
  • Reverse the parabolic SAR from negative to positive.

Along with all this, the MACD indicates increasing bullish market momentum. However, the top is presently blocked by the 50-day SMA.

Image: ADA/USD daily

ADA/USD daily chart 072821

As mentioned, the Cardano price has healthy support at the 20-day SMA ($1.25) which has blocked any further downtrend. Previously, at this level, around 145,000 addresses had purchased nearly 2.64 billion ADA tokens.

Image: IntoTheBlock

ADA/USD volume chart 072821

Morningstar Strategist: Cardano To Become Mainstream Crypto

Amy Arnott, portfolio manager at the American investment research giant Morningstar, stated in a recent forecast that Cardano, together with Bitcoin and Ethereum, can form a “big three” of mainstream cryptocurrencies.

The cryptocurrency-focused strategist discussed crypto regulation, Ethereum, and Cardano in a conversation with the Business Insider last week. Sharing her ideas, Arnott noted that the blockchain has numerous possible technological applications that may pique the interest of institutional investors in particular.

Arnott confirmed:

“Cardano is similar to Ethereum in that it’s a protocol that has a lot of potential technical applications. There’s a lot of enthusiasm about Cardano and also various stablecoins.”

Writing about Ethereum on her site, Arnott revealed:

“Despite its huge gains in the past, ether’s extreme volatility will likely rule it out for many conventional investors. As with bitcoin, it’s also difficult to pin down what its underlying value should be because it doesn’t generate cash flows.”

Additionally, the strategist expressed that since the Securities and Exchange Commission (SEC) in the United States has yet to approve any crypto exchange-traded fund, it makes it “very difficult for mainstream investors to gain exposure to cryptocurrencies.” 

For Cardano to become a mainstream cryptocurrency, joining the ranks of Bitcoin and Ethereum among a diversified crypto index fund in the industry, Arnott expanded:

“Regulatory risk is a big issue – that’s been the driving factor behind a lot of the volatility over the past few months. If governments around the world clamp down on crypto in general, or bitcoin and ether specifically, that would be a large negative.”

Cardano Price Is Expected To Reach These Levels

Crossing the 50-day SMA will enable Cardano price to retrace its paths to the $1.45 resistance barrier. Breaking above that will help ADA to reach the $1.50 psychological level.

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