Potential 30% Decline in Cardano (ADA) Value: An In-Depth Analysis

• Cardano (ADA) is currently experiencing a bearish market structure, with technical indicators projecting a potential deep price drop.
• Despite forming a bullish chart pattern and improved social metrics, ADA’s price action remains uninspiring.
• Investors need to be prepared for a potential 30% plunge in ADA’s value.

Cardano’s bearish market structure and technical indicators project a potential deep price drop. Despite a bullish chart pattern and improved social metrics, ADA’s price action remains uninspiring. Investors need to be prepared for a potential 30% plunge in ADA’s value.

Cardano’s Bearish Market Structure

Throughout 2024, ADA has mostly traded within a range that reached from $0.447 to $0.678. In the past month, the prices have consistently hovered at or just below the range lows. Additionally, in early April, the mid-range support level at $0.567 was breached and a sizeable imbalance was left on the chart. This region was retested as resistance in mid-April. Since then, the buying pressure has been insufficient for bulls to reclaim the $0.5 level.

The Potential for a 30% Plunge

The Fibonacci levels plotted based on the move down from $0.81 in March showed that the 23.6% southward extension at $0.3 was the next bearish target. This was reflected in the OBV which was back at a support level from earlier this year. Until buying volume and the OBV trends higher, more losses would be likely. The RSI on the daily chart was also below neutral 50 to reflect downward momentum.

Short-Selling Becomes Popular

On the 11th and the 12th of May, the price of Cardano fell by 2% but the Open Interest rose slightly by $3 million. This showed that short-sellers were entering the market and outlined bearish sentiment. The spot CVD also continued its downtrend, showing a lack of buying. The 30% drop projected by the Fibonacci levels could become a reality if the bulls do not step in and halt the consistent selling pressure.

Conclusion

Cardano’s bearish market structure and technical indicators project a potential deep price drop. Despite a bullish chart pattern and improved social metrics, ADA’s price action remains uninspiring. Investors need to be prepared for a potential 30% plunge in ADA’s value. The bulls have not shown any signs of strength and were desperately fighting to defend the long-term range lows.