- Cardano price makes new low for 2022 on Wednesday.
- ADA price still trades in oversold mode but starts to flatline.
- Expect a swing back up to $0.265 soon under thin liquidity.
Cardano (ADA) price was having yet again another hangover on Wednesday, where equities were rallying but the tailwind refrained from spilling over to some cryptocurrencies. On the Relative Strength Index (RSI), ADA is still trading in an oversold area, but is starting to flatline. This could open a small window of recovery back to $0.265 by Christmas.
Cardano bulls are betting on the drop in liquidity
Cardano price bounced a little after it made new lows for 2022 but closed at the same low for the week, near $0.253. For the third time this week, the level holds at the close, and the RSI starts to flatline, pointing to a shift in sentiment in favor of the ADA bulls. With liquidity thinning out, any bullish move will be enlarged and will see a quick swing back higher.
ADA is thus set for at least a bit of recovery, although the first cap at the topside is difficult. Not only is that pivotal level near $0.265 a historical pivot from December 24, 2017, but it is also the monthly S1 support level that is now a resistance level. So to break that, quite a lot of pressure will need to be built. An extension of a big rally could possibly target $0.297 by New year, although that chance is fading by the day.
ADA/USD daily chart
During the ASIA PAC and European sessions, ADA has been trading near that same low near $0.253, where price action closed on Wednesday. The risk comes that if that level now breaks again to the downside, a daily close below it could trigger a sharp selloff towards $0.22 in search of the monthly S2 support level. That would mean that the Christmas rally will not come this year, and the outlook would look more negative for the start of 2023.