The cryptocurrency market faces challenges today, December 22, 2024, with Cardano (ADA) showing signs of a notable price drop.
After forming a bearish head-and-shoulders pattern, ADA appears poised for further declines. On-chain analytics reveal cautious trading behavior, while long-term holders display optimism despite the bearish sentiment.
Technical Analysis: Cardano’s Bearish Setup
Recent technical analysis from CoinPedia highlights troubling signals for Cardano:
- Breakdown Pattern: ADA has broken down from a head-and-shoulders formation.
- Retest Level: A retest of the breakdown confirms the bearish trend.
- Price Target: ADA could drop 15%, reaching the next support level at $0.80.
If this sentiment persists, analysts believe the $0.80 target could be reached soon.
On-Chain Metrics Show Long-Term Optimism
Despite short-term bearish trends, on-chain data from Coinglass indicates positive sentiment among long-term holders:
- $200 Million Outflow: ADA has seen significant outflows from exchanges over the past week.
- No Inflows Recorded: This suggests investors are moving ADA to private wallets for accumulation.
This trend reflects confidence among long-term holders, potentially setting the stage for future gains.
Current Price Movement
At the time of writing, ADA trades near $0.89, marking a 5.5% decline in the past 24 hours. Trading volume has also dropped by 45%, signaling reduced market participation. While short-term trends remain bearish, the ongoing accumulation by long-term holders may provide a silver lining.
What’s Next for Cardano?
With ADA approaching the $0.80 support level, traders should watch for signs of a rebound. If the bearish sentiment shifts, it could create opportunities for recovery. Long-term investors may view the current dip as an ideal accumulation phase.
