There is no question that the longer-term trend remains upwards for the Cardano price, and this trend will remain in play as long as the ADAUSD rate remains above the April low of 0.9224. However, the Cardano price is facing short-term weakness, and there is a genuine risk that we could see a temporary 10% to 20% slide in ADA.
Why is the May 29 low important for ADA?
At pixel time, ADAUSD was trading above the May 29 low of 1.3349, and as long as Cardano remains above this low, the short-term trend will remain upwards. As the price trend is upwards, the following potential resistance levels come into play: the June 9 high of 1.6345, followed by the June 5 high of 1.7818, and the June 3 high of 1.8845.
As the price was trading at 1.4554, the risk-reward ratio was good for fresh long positions with stops below the May 29 low. However, there is a general lack of demand for most cryptocurrencies, which is dragging ADA lower. Thus if the Cardano price would trade below the May 29 low of 1.3349, the attitude of investors and trader will probably change abruptly.
I suspect we would see a lower ADA price on a break to the low as investors would bail out from their long positions, and leverage traders would get their stops loss orders triggered.
The rationale for seeing a big sell-off in the Cardano price on a slide below the 1.3349 low is because the next support level is the May 23 low of 1.0524. Thus, a slide below 1.3349 could trigger a near 20% drop, which is enough for people to lighten up their positioning.