Usman Salis
Cardano (ADA) may be reaching a critical technical turning point. The coin's Relative Strength Index has fallen to around 39, suggesting it's entering oversold territory where past reversals have occurred.
Chart Analysis: RSI Near Multi-Month Low
Market analytics platform TapTools flagged this setup, catching the attention of traders looking for signs of recovery after ADA's recent pullback. With cautious sentiment across altcoins, this could present a short-term opportunity if history repeats itself.
The TradingView daily chart shows ADA trading around $0.66, holding steady after pulling back from its October high near $0.90. Since early 2023, Cardano has been trading within a wide channel between $0.25 and $0.70, bouncing between these levels as it builds long-term support.
The 14-day RSI currently sits at 38.24, just above the oversold mark of 30. This level has repeatedly triggered reversals before:
- Mid-2022: RSI below 40 led to a 40% rally
- Late 2023: Similar reading sparked a move toward $0.70
- Mid-2024: Same zone kicked off a brief recovery
This pattern hints that the current weakness might actually be setting up for a rebound rather than further decline.
Key Technical Levels
ADA's immediate support sits near $0.63–$0.64, lining up with a structural zone visible on the chart. The 9-day moving average is around $0.668, acting as short-term resistance. If support holds, traders might see a bounce toward $0.70, the channel's upper resistance. But if $0.63 breaks, a deeper drop toward $0.55–$0.58 could follow, where strong buying has appeared historically. The RSI near oversold levels suggests limited downside risk, while increased buying volume could spark upward movement.
The RSI measures momentum and flags when assets are overbought (above 70) or oversold (below 30–40). Readings near 39 typically mean sellers are losing steam and price could stabilize or reverse soon. For Cardano, these readings have previously marked accumulation periods where long-term holders quietly re-enter before new market cycles kick in. The current setup looks similar, suggesting ADA might be nearing a local bottom rather than starting a fresh downturn.
Usman Salis
