The cryptocurrency market remains under intense pressure, and Cardano’s native token, ADA, is not immune to the downturn. With major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) struggling to gain upward momentum, ADA’s price has followed suit, forming bearish patterns that suggest more declines could be ahead.
Bearish Technical Indicators for ADA
Technical analysis on ADA points to a gloomy outlook in the short term. The formation of a descending triangle pattern on its daily chart is a bearish signal, often a precursor to further downside. This pattern comes after the completion of a head-and-shoulders formation, which has contributed to the current downtrend.
ADA’s price is now testing a critical support level at $0.825. If the token breaks below this level and closes a daily candle beneath it, analysts predict a 10% drop, with the next support target around $0.75. However, ADA may avoid further declines if it can maintain support above the $0.825 mark, potentially stabilizing the price in the short term.
Investor Sentiment: Caution Amid Uncertainty
Despite the bearish short-term outlook, long-term investors seem to remain confident in ADA. According to Coinglass, a substantial $37.92 million worth of ADA has been withdrawn from exchanges, indicating a shift toward private wallets. Such outflows typically reduce sell-side pressure and suggest that some investors see current prices as a buying opportunity, potentially signaling accumulation.
However, traders are more cautious, particularly as ADA nears its critical support level. Open interest in ADA has dropped by 3.9% in the past 24 hours, reflecting a hesitancy to take on new positions. This lack of confidence has led to the liquidation of millions in long positions, further compounding ADA’s downward pressure.
Also Read: Cardano (ADA) Teeters on This Critical Support Zones Amid Persistent Downtrend
What’s Next for ADA?
At the time of writing, ADA is trading near $0.8456, down 3.15% over the past 24 hours. Trading volume has risen by 15%, suggesting increased activity in the market. As ADA tests critical levels, the next few days could be crucial in determining its future price trajectory. Investors and traders alike will be watching closely to see if ADA can stabilize or if further declines are on the horizon.
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.
About The Author
