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Cardano (ADA) in Dire State, Shiba Inu (SHIB) Needs Some Help, Ethereum (ETH) Dominance Continues

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Wed, 29/05/2024 - 0:30
Cardano (ADA) in Dire State, Shiba Inu (SHIB) Needs Some Help, Ethereum (ETH) Dominance Continues
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In its current state, Cardano is clearly having some serious issues, with ADA struggling to maintain its bullish market pace and moving below the 50 EMA resistance level. Additionally, ADA never broke through the 200 EMA in the first place, which puts it in the category of the most poorly performing assets during this bull run.

From the chart, Cardano is grappling with immense resistance coming from the 50 EMA, the 100 EMA and the 200 EMA. This convergence of moving averages in such a bearish place offers a warning of a consistent continuation of the downtrend and weakness in the bullish momentum. Currently, the price is hanging out around this $0.45 level — a very important area of support for Cardano. A breakdown below this level could trigger further declines.

ADAUSDT Chart
Cardano/USDT Chart by TradingView

Volume analysis also shows a lack of buying interest. Recent trading volumes are on the lower side, which provides no force to penetrate the countering levels. This lack of volume support is thus indicative that any upward moves could be short-lived, with potential quick reversals.

Shiba Inu in trouble

SHIB is under tremendous pressure to hold ground above the 50-day EMA line. Presently, its price straddles just above this support and is running dangerously close to the wire. At the first sign of significant selling pressure, it might pierce right through this level, ushering in a more substantive drop. With SHIB so far below the 100-day EMA line and the 200-day EMA line, neither of these long-term indicators is going to be helpful in offering much support.

The RSI is in the bearish zone below the level of 50, suggesting that SHIB lacks buying strength and may thus continue to drift lower until a major positive trigger arises.

Related

SHIB needs to regain and retain its 50-day EMA for it to come back to a stable state, and in an ideal scenario, it would do this on an expanding trading volume. The next resistance levels to watch would be the 100-day EMA around the $0.000027 and 200-day EMA around the $0.000029, where breaking through these levels would mean that we could possibly get a reversal of the present downtrend.

Ethereum's strength 

Ethereum stays composed even after the market sees a surge of selling pressure, thanks to the distribution of the Mt.Gox funds. Instead of a correction, ETH continues its way upwards and even performs the first test of the $4,000 resistance. This resilience showcases Ethereum's growing dominance on the crypto market.

ETH has managed to hold above the critical moving averages. Notice on the chart that the 50-day EMA is providing immense support for the asset in recent pullbacks, which could have otherwise been avoided from a massive drop. The 100-day EMA and the 200-day EMA point to the strength in the upward bullish momentum.

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One key element that can be observed is the surge in trading volumes that follows the most recent ETH gain. It suggests that the interest in buying is powerful enough to counter selling pressure, which bodes well for the uptrend to continue. Meanwhile, the Relative Strength Index holds above the 70 mark, signaling that the price of ETH is placed in overbought conditions but still has room to rise further to the upside before a pullback is due.

However, in the event that Ethereum convincingly breaks above the tight spot at the strong resistance level of $4,000, the next target should be around $4,200, after which $4,400 would be targeted. However, ETH might be rejected in the zone around the $4,000 level, with a minor corrective move targeting the $3,700 support area in confluence with the 50-day EMA. This means there may be a healthy pullback in the value of ETH, allowing some gains in stalling momentum to lead to another attempt to break above the $4,000 psychological level.

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