- Cardano (ADA) faces a potential 30% drop as bearish patterns and negative momentum indicators suggest further downside.
- If ADA breaks below key support levels, it could target $0.40 in the near future.
Cardano (ADA) has been struggling in recent weeks, with significant losses accumulating since the start of the year. While its performance has been milder than rivals like Solana (SOL) and Ethereum (ETH), ADA’s ongoing decline is certainly concerning for investors. Recent technical analysis shows the cryptocurrency may be facing a tough road ahead, with a potential drop of up to 30% if bearish patterns continue to play out.
Bearish Patterns Confirmed: ADA’s Struggle at $0.5750
ADA has broken through two critical bearish patterns, which could signal further downside in the near future. On the daily chart, momentum indicators such as the Relative Strength Index (RSI) and the MACD are heavily tilted in favor of the bears. The RSI has moved 20% away from its signal line, indicating that negative momentum is gaining traction. The MACD histogram has also confirmed the bearish outlook with consecutive negative bars, suggesting that sellers have control of the market.
Despite a brief bounce, Cardano is still struggling at key resistance levels. The $0.570 support area now acts as a significant resistance point, and the next major support is at $0.510. If this level fails to hold, ADA could experience a steep drop, potentially losing another 30% of its value.
What’s Next for Cardano: A Possible Drop to $0.40?
If the sell-off continues, ADA is at risk of breaking below the $0.51 level, which could trigger a move toward $0.40. A bearish pennant pattern is forming, suggesting that a decline based on the pole size of the pennant could be on the horizon. This bearish scenario is being driven by depressed market sentiment, as the Fear and Greed Index has dropped to near-record lows, indicating extreme fear among investors.
Cardano Struggle at Key Fibonacci Levels
On the hourly chart, ADA faces strong selling pressure at the 61.8% Fibonacci retracement level, further confirming the bearish sentiment. The coin attempted to break above this level but was met with heavy resistance, reinforcing the current downtrend. Momentum indicators on shorter time frames are somewhat bullish, but given the overall market sentiment, it’s likely that ADA will continue to struggle in the coming sessions.
Waiting for Confirmation: Will ADA Break Lower?
At this point, the most prudent approach for traders may be to wait for a confirmation of the bearish trend. A solid break below the $0.51 level could prompt a retest of new lows, pushing ADA even lower. With market sentiment in a deep slump, ADA’s path forward seems increasingly uncertain. Investors should prepare for potential volatility as ADA battles against strong headwinds.
