Cardano price shows a rejection around the SuperTrend indicator’s sell-signal that was flashed on February 28. Since then, ADA has dropped 10% and shows signs of continuation.
Although Cardano's current state might seem bearish, it will provide the buyers an opportunity to come back a lot stronger and push the so-called “Ethereum killer” to record levels.
Additionally, each of these downswings ranged anywhere from 30% to 33%. Therefore, if something similar were to happen this time, Cardano could drop 15% from its current price at $1.23 before it kickstarts a bull rally.
Interestingly, this pullback coincides with the 100 four-hour moving average (MA) at $1.03.
Based on IntotheBlock’s In/Out of the Money Around Price (IOMAP) model, nearly 32,500 addresses who purchased 1.65 billion ADA at an average price of $1.26 are “Out of the Money.”
So, any buying pressure could be absorbed by these investors who may want to breakeven. This selling activity will create a downward pressure pushing ADA lower and supporting the short-term bearish thesis.
However, after the pullback, the so-callled "Ethereum killer" can be expected to surge past the aforementioned resistance barriers as the inverse head and shoulders pattern is still in play.
This move will kickstart a bull rally pushing the Cardano price to a new all-time high.