The cryptocurrency market is facing a challenging period as of December 27, 2024, with significant price declines impacting major digital assets, including Bitcoin (BTC), Ethereum (ETH), and XRP. This downturn has affected the overall sentiment, pushing it towards a bearish trend. Among the affected cryptocurrencies is ADA, the native token of the Cardano blockchain, which is struggling to hold onto its critical support levels.
Cardano (ADA) Current Momentum
Currently, ADA is trading at approximately $0.864, reflecting a sharp decline of over 6.9% in the last 24 hours. This drop has brought ADA to a pivotal support level. Should this level fail to sustain, ADA may experience an additional 15% decline, potentially dipping below the $0.75 threshold. The prevailing bearish sentiment has incited fear among investors and traders, which is evident from the reduced trading activity. Data from CoinMarketCap indicates that ADA’s trading volume has decreased by 16% over the past day.
Cardano (ADA) Technical Analysis and Upcoming Level
Technical analysis experts have observed that ADA recently broke down from a bearish head and shoulders pattern, marking a critical phase. Over the past week, the altcoin has been consolidating below the neckline of this pattern. The recent price drop has pushed ADA to the lower edge of its consolidation zone, increasing the risk of a further breakdown.
According to market analysis sourced from Trading View, if ADA falls below this level and closes a daily candle beneath the lower boundary, a 15% decline is likely, potentially reaching $0.77. For this bearish trend to continue, ADA must close below the $0.85 mark, forming the lower boundary of the consolidation zone. Should ADA remain above this level, the anticipated bearish scenario may not unfold.
On-Chain Metrics Reveals Mixed Sentiment
Despite the prevailing bearish market outlook, there are signs of optimism among long-term holders. In contrast, traders remain cautious about initiating new positions, as per insights from the on-chain analytics firm Coinglass. Recent data on ADA’s spot inflow/outflow highlights a notable $4.7 million outflow from exchanges, indicating potential accumulation and buying pressure.
Conversely, there is evidence of traders liquidating their positions, reflected by an 8.2% decrease in ADA’s open interest over the last 24 hours. This mixed sentiment suggests that while some investors are seizing the opportunity to accumulate ADA, others are reducing their exposure amidst market uncertainty.
