The cryptocurrency market is grappling with widespread bearish sentiment, with Cardano (ADA) standing out for its notable price decline. The altcoin recently formed a bearish head-and-shoulders pattern, signaling a potential drop, as traders and investors exhibit hesitation in participating, according to Coinglass.
Bearish Technical Indicators for Cardano (ADA)
Technical analysis highlights a grim outlook for ADA. The altcoin has broken down from a key head-and-shoulders pattern and retested the breakdown level, confirming its potential for a further decline. Analysts predict a 15% drop, bringing ADA to its next support level at $0.80 if bearish sentiment persists.
At press time, ADA is trading near $0.91, marking a 5.7% decline in the past 24 hours. Furthermore, ADA’s trading volume has plummeted by 45% during this period, indicating a lack of enthusiasm from traders amid the ongoing downtrend.
Optimistic On-Chain Metrics Show Accumulation
While short-term technical trends suggest bearish movements, long-term on-chain metrics reveal optimism among ADA holders. Coinglass reports a significant $200 million outflow of ADA from exchanges in the past week, with no notable inflows. This movement implies that long-term investors are accumulating ADA, despite the current price slump.
Also Read: Cardano Price Faces Bearish Pressure, Will ADA Hold Above $0.8 or Dip to $0.5?
This behavior suggests confidence in ADA’s future potential, as investors move their holdings to private wallets, signaling an intent to hold rather than sell. For savvy investors, this could indicate a prime buying opportunity during the downturn.
What Lies Ahead for Cardano?
Although Cardano faces short-term challenges, the significant exchange outflows and accumulation by long-term holders could pave the way for future bullish momentum. For now, the $0.80 support level serves as a critical marker for ADA’s next potential move.
Investors are advised to keep an eye on ADA’s price action and trading volume, as these metrics will provide further insights into market sentiment and potential recovery trends. The current market conditions offer a mixed bag for ADA, balancing short-term risks with long-term opportunities.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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