Will ADA drop towards $1 as the market continues to underperform?
The broader cryptocurrency market continues to underperform and looks likely to end the year in a bearish trend.
The cryptocurrency market hasn’t had an excellent past six weeks. The prices of most coins are down by more than 30% since the all-time high they achieved at various points in 2021. Bitcoin is down by more than 3% today and is trading just above the $46k level.
ADA, the native token of the Cardano ecosystem, is also one of the worst performers amongst the leading cryptocurrencies. ADA’s value is down by more than 6% at the moment, and the cryptocurrency is currently trading around $1.22 per coin.
As the losses in the market continue to increase, ADA could record further losses and could be forced to defend its value. Cardano was previously the third-largest cryptocurrency, behind only Bitcoin and Ethereum.
However, its recent poor performances have allowed other cryptocurrencies like the Binance Coin and Solana to overtake it.
Key levels to watch
The ADA/USD 4-hour chart is one of the most bearish amongst the top ten cryptocurrencies by market cap. The technical indicators show that ADA is struggling at the moment, and the losses could be extended in the coming hours.
The MACD line is below the neutral zone, indicating a bearish trend for Cardano against the US Dollar. Furthermore, the RSI of 42 shows that ADA is heading towards the oversold region as the selling pressure increases.
If the current market condition is maintained, then ADA could drop below the $1.10 support level over the next few hours. An extended bearish performance could see ADA drop below the $1.0 mark for the first time in months.
However, if the bulls regain control of the market, ADA could test the $1.41 resistance level in the coming hours. Unless there is a massive rally, the $1.70 resistance level should cap any short-term upward trend for the cryptocurrency.