Cardano’s (ADA) price has not escaped the ongoing cryptocurrency sell-off, a downturn that many analysts believe is partly fueled by the absence of a statement or executive order from Donald Trump on cryptocurrencies. With uncertainty still clouding the regulatory landscape, ADA risks a 20% decline in the short term, as technical indicators suggest a bearish trend.
Double-Top Formation Signals Potential Downside
A key technical pattern has emerged for Cardano: a double-top formation at $1.152, where the price failed to break through on January 7 and 17. This pattern is often a precursor to price declines, with the neckline at $0.882 marking the critical support level. Should the price fall below this support, ADA could drop by 8.35% to $0.882, triggering further downside pressure.

Compounding the bearish outlook, Cardano’s 50-day and 100-day moving averages are nearing a bearish crossover, adding to the risk of further losses. If ADA fails to hold the support at $0.882, a further decline to $0.762 could unfold, representing a 20% drop from the current price levels.
Bullish Reversal Possible in the Long Term
While the short-term outlook is bearish, long-term charts suggest potential for a bullish reversal. On the weekly chart, ADA has formed a break-and-retest (B&R) pattern, returning to key support at $0.807, a crucial level from March last year. If Cardano remains above this support, it could trigger a continuation of the upward trend.
Additionally, ADA is currently forming a bullish pennant pattern, with a clear flagpole and triangle formation. A breakout above the resistance at $1.326 could propel Cardano to its all-time high of $3.15.

Catalysts for Future Growth
Cardano’s long-term prospects remain promising, with upcoming developments like the Midnight scaling solution and integration with BitcoinOS. Charles Hoskinson has also expressed interest in partnerships with networks like Terra Luna Classic and Chainlink, which could further strengthen the Cardano ecosystem and fuel future growth.
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.