As we approach the end of December 2024, Cardano’s native token, ADA, is facing a challenging period marked by a persistent price decline. This downturn can be attributed to a combination of factors, including ongoing market uncertainty, the emergence of bearish price action patterns, and a prevailing negative sentiment that has gripped the cryptocurrency sector. Notably, ADA is not alone in this struggle; major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) are also finding it difficult to gain upward momentum.
Cardano (ADA) Technical Analysis and Upcoming Levels
Expert technical analysis suggests a bearish outlook for ADA in the short term. The token has formed a descending triangle price action pattern on the daily time frame, signaling a potential breakdown. This pattern follows the breakdown of a previous bearish head-and-shoulders price action pattern. Drawing insights from historical price momentum, if ADA breaches the support level of the descending triangle and closes a daily candle below the crucial $0.825 mark, there is a significant likelihood of a further 10% decline. This could push the price down to a key support level at $0.75. However, this bearish scenario will only materialize if ADA closes below $0.825; otherwise, it might avoid further decline.
$38 Million ADA Outflow
Despite the bearish sentiment, long-term holders continue to demonstrate strong interest and confidence in ADA. According to Coinglass, an on-chain analytics firm, there has been a notable outflow of ADA, valued at approximately $37.92 million, from exchanges to wallet addresses. This outflow metric is crucial as it highlights the amount of an asset withdrawn from exchanges, suggesting potential upside momentum and increased buying pressure. Moreover, it presents an opportune moment for strategic buying.
While long-term holders are taking advantage of the current price levels, traders remain cautious as ADA approaches a critical price point, poised for a possible breakdown. This caution has led to the liquidation of millions of dollars in long positions. The data reveals a 3.9% drop in ADA’s open interest over the past 24 hours, indicating a shift in market sentiment.
Current Price Momentum
As of the latest data, ADA is trading near $0.8456, having experienced a 3.15% price decline in the past 24 hours. During this period, trading volume surged by 15%, reflecting increased participation from traders and investors compared to the previous day. This heightened activity suggests a growing interest in ADA, even amid its challenging market conditions.
In conclusion, the current market landscape for Cardano (ADA) is characterized by a bearish trend, but the involvement of long-term holders and increasing trading activity offers potential insights into future price movements. Investors and traders should remain vigilant, closely monitoring technical patterns and market dynamics to make informed decisions.
