The cryptocurrency market is experiencing a significant downturn as of December 27, 2024. This decline has impacted major digital assets like Bitcoin (BTC), Ethereum (ETH), and XRP, shifting the overall market sentiment towards a bearish trend. Cardano (ADA), the native token of the Cardano blockchain, is also grappling with this market volatility as it struggles to maintain its critical support level.
Cardano (ADA) Current Momentum
At the time of writing, Cardano (ADA) is trading around $0.864, reflecting a substantial decrease of over 6.9% in the past 24 hours. This decline has led ADA to a pivotal support level. Should this level falter, the asset is at risk of dropping another 15%, potentially falling below the $0.75 mark. This bearish movement has instilled apprehension among traders and investors, resulting in a noticeable decline in trading volume. According to CoinMarketCap, ADA’s trading volume has decreased by 16% in the past day.
Cardano (ADA) Technical Analysis and Upcoming Levels
Technical analysis experts indicate that ADA has recently broken down from a bearish head and shoulders pattern. Over the last week, the token has been consolidating below the neckline of this pattern. As the price continues to decline, ADA’s value has approached the lower boundary of this consolidation zone, teetering on the brink of a more significant breakdown.
Should the altcoin breach this critical level and close a daily candle below the zone’s lower boundary, it could potentially experience a further 15% decline, reaching approximately $0.77. The bearish outlook for ADA will remain valid only if it closes a daily candle below $0.85, marking the lower boundary of the consolidation zone. If ADA manages to stay above this level, the bearish scenario may not unfold.
On-Chain Metrics Reveal Mixed Sentiment
Despite the prevailing bearish sentiment, there is a glimmer of optimism among long-term holders. In contrast, traders remain cautious about initiating new positions. On-chain analytics from Coinglass reveal that there has been a significant outflow of $4.7 million worth of ADA from exchanges, indicating potential accumulation and buying pressure.
However, the trading landscape presents a different picture. Traders appear to be closing their positions, as evidenced by an 8.2% decline in ADA’s open interest over the past 24 hours. This trend highlights the mixed sentiment prevailing in the market, with long-term holders showing resilience while traders exhibit caution.
As the cryptocurrency market continues to navigate through volatility, Cardano’s (ADA) ability to maintain its support levels will be crucial in determining its near-term trajectory. Investors and traders alike will be closely watching the market movements and technical indicators to strategize their next moves.
