Cardano (ADA) has plunged over 17% in the last 24 hours, sending the token below the $1 psychological mark. As one of the hardest-hit assets in a broader market downturn affecting major altcoins like XRP and DOGE, ADA now faces critical resistance zones that could determine its short-term trajectory. Despite these challenges, analysts remain optimistic about its potential for recovery, provided key support levels hold firm.

Key Resistance Levels: A Battle for Recovery

Cardano’s price is struggling to overcome a critical resistance range between $1.12 and $1.24. This zone has proven to be a formidable barrier, with multiple failed attempts to break through in recent weeks.

For a sustained recovery, ADA must close a weekly candle above $1.24, which could pave the way for a test of the $1.46 resistance level. This area is significant as it aligns with prior highs, marking a potential reversal point for bulls.

Beyond this, further resistance lies near the 78.6% Fibonacci retracement level around $1.76 to $1.77, an ambitious target that could reignite optimism in the market.

Support Zones Under Scrutiny

On the downside, ADA investors are closely watching two key support levels: $0.90 and $0.82. These levels have historically acted as strong footholds during periods of price retracement.

Should the price dip below $0.82, it could signal a deeper bearish trend, potentially eroding confidence among long-term holders. However, a bounce from these levels would suggest renewed buying interest, making them critical for gauging market sentiment.

Bearish Divergence Signals Near-Term Caution

One of the more concerning indicators for Cardano is the bearish divergence forming on its short-term charts. This phenomenon occurs when the price posts higher highs while the Relative Strength Index (RSI) trends lower, indicating weakening bullish momentum.

Currently, ADA’s RSI reflects this divergence, suggesting that the recent rally may have lost steam. This could lead to a period of sideways consolidation or even a further pullback before any meaningful recovery takes place.

Long-Term Perspective: Bullish Sentiment Persists

Despite its short-term struggles, ADA’s long-term prospects remain robust, supported by growing adoption of the Cardano blockchain and advancements in its ecosystem. The token’s fundamentals continue to show promise, with developers focusing on scalability, interoperability, and sustainability—key factors that could drive demand in the coming months.

Market sentiment also leans bullish overall, with institutional interest and broader crypto adoption painting a positive picture for assets like ADA. These factors suggest that the current dip might be more of a temporary setback than a sign of prolonged weakness.

What’s Next for ADA?

Traders and investors should keep a close eye on the following developments:

1. Resistance Breakout: A decisive move above $1.24, confirmed by strong volume, could reignite bullish momentum and set ADA on a path toward $1.46 or higher.
2. Support Testing: Watch for a retest of $0.90 and $0.82 levels. A bounce here would signal resilience, while a breakdown could lead to further losses.
3. RSI Trends: Monitoring the RSI for signs of recovery or continued divergence will provide clues about ADA’s near-term direction.
4. Market Trends: Broader crypto market movements often influence ADA’s price. Positive sentiment or rallies in major assets like Bitcoin could provide a tailwind.

Final Thoughts

Cardano’s sharp decline below $1 has put the token in a precarious position. While short-term resistance and bearish divergence suggest caution, the long-term outlook remains positive, supported by strong fundamentals and a bullish macro environment.

Breaking above $1.24 could signal the start of a recovery, while support at $0.90 and $0.82 will be crucial in preventing further downside. As ADA navigates these pivotal levels, traders should remain vigilant, balancing short-term risks with long-term opportunities.