Cardano (ADA) Price Drops 4.6% as U.S. Government Blockchain Exclusion Triggers Selling Wave

Quick Take

• ADA currently trading at $0.83 (-4.63% in 24h)
• Cardano’s RSI at 47.16 suggests neutral momentum despite recent decline
• U.S. government blockchain initiative exclusion drives latest selling pressure with $6.88M outflows

What’s Driving Cardano Price Today?

The ADA price faced significant selling pressure over the past 24 hours following news that Cardano was excluded from the U.S. government’s blockchain data initiative. This exclusion triggered net outflows of $6.88 million on August 29, pushing the token below the critical $0.90 resistance level that bulls had been defending.

Despite earlier bullish predictions from August 28 suggesting ADA could test the $0.89-$0.90 zone, the government initiative news overshadowed technical momentum. The exclusion represents a setback for Cardano’s institutional adoption narrative, particularly as competitors like Bitcoin and Ethereum continue to gain regulatory clarity.

The selling wave also coincided with broader market uncertainty, as traders had been positioning for potential rate cuts in September that Cardano founder Charles Hoskinson highlighted as influential for ADA’s future trajectory. However, the immediate impact of regulatory exclusion outweighed these longer-term considerations.

ADA Technical Analysis: Mixed Signals Emerge

Cardano technical analysis reveals a complex picture with the ADA RSI sitting at 47.16, indicating neutral territory rather than oversold conditions. This suggests the recent decline may not have reached capitulation levels yet.

The MACD histogram shows bearish momentum at -0.0120, confirming the downward pressure on ADA price. However, Cardano’s position relative to its moving averages tells a more nuanced story. While trading below the 7-day SMA ($0.87) and 20-day SMA ($0.88), ADA remains above both the 50-day SMA ($0.82) and 200-day SMA ($0.73), indicating the longer-term uptrend remains intact.

Cardano’s Bollinger Bands show the token trading near the lower band at $0.78, with a %B position of 0.2351. This suggests ADA is approaching oversold territory within its recent trading range, though it hasn’t reached extreme levels that typically signal reversal opportunities.

The Stochastic indicators paint a more bearish picture, with %K at 6.42 and %D at 14.24, both well into oversold territory. This divergence between RSI and Stochastic readings suggests conflicting short-term momentum signals.

Cardano Price Levels: Key Support and Resistance

Based on Binance spot market data, Cardano support levels are now critical for determining the next price direction. The immediate support sits at $0.77, which aligns closely with the lower Bollinger Band and represents the first major test for buyers.

Should the $0.77 level fail to hold, ADA could face a deeper correction toward the strong support at $0.67. This level would represent a significant 19% decline from current prices but would still maintain the longer-term uptrend structure.

On the upside, ADA resistance remains formidable at $1.02, which serves as both immediate and strong resistance according to current technical levels. For bulls to regain control, Cardano would need to reclaim the $0.90 level that was lost during yesterday’s selling wave.

The pivot point at $0.84 sits just above current prices, suggesting any bounce attempt will face immediate resistance. Traders should watch for volume confirmation on any move above this level, as it could signal renewed buying interest.

Should You Buy ADA Now? Risk-Reward Analysis

For aggressive traders, the current ADA price presents a potential contrarian opportunity, given the oversold Stochastic readings and proximity to key support levels. However, the bearish MACD momentum suggests waiting for confirmation of a reversal pattern before entering long positions.

Conservative investors should wait for ADA to reclaim the $0.90 level with volume before considering new positions. The regulatory setback from the government blockchain initiative exclusion may take time to digest, potentially keeping pressure on Cardano for several trading sessions.

Swing traders might consider a scaling approach, with initial positions near current levels and additional buying if ADA tests the $0.77 support. Stop losses should be placed below $0.75 to limit downside risk, while targets could focus on a return to the $0.90-$0.95 range.

Day traders should note Cardano’s daily ATR of $0.06, indicating moderate volatility that could provide intraday opportunities. The ADA/USDT pair on Binance shows healthy volume at $149 million, ensuring adequate liquidity for position management.

Conclusion

Cardano faces a critical juncture as the ADA price tests key support levels following regulatory disappointment. While technical indicators show mixed signals, the proximity to oversold conditions and established support at $0.77 may provide near-term stabilization. Traders should monitor whether buyers emerge at current levels or if further weakness toward $0.67 develops over the next 24-48 hours.

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