Cardano could decline by 20% and reach the $0.31 level, as its daily chart has formed a bearish pattern.
- ADA’s Long/Short Ratio was at 0.93, indicating bearish sentiment among traders. A prominent crypto expert believes that ADA could face a short-term price correction.
Amid an ongoing price correction across the cryptocurrency market, Cardano [ADA] appeared poised for a significant price decline, as its daily chart formed a bearish pattern.
Alongside ADA, other major cryptocurrencies, including Bitcoin [BTC], Ethereum [ETH], and Solana [SOL] also experienced price corrections.
Cardano key levels
According to AMBCrypto’s technical analysis, ADA appeared bearish as it formed a bearish pin bar candle, touching the resistance from the descending trendline at press time.
The formation of such a candlestick pattern on the daily chart is considered a bearish signal, which traders and investors take into account when building short positions.
Source: TradingView
Since April 2024, ADA has touched this resistance level multiple times, and each time it faced selling pressure. However, this time, the crypto community expects a similar selling pressure and price decline.
Based on the recent price action, if ADA closes a daily candle below the $0.3912 level, there is a strong possibility it could decline by 20% to reach the $0.31 level in the coming days.
However, this bearish thesis will only hold as long as ADA is trading below the $0.42 level. If it breaches this level, the bearish outlook may fail.
ADA is bearish, on-chain
This negative sentiment for ADA was further supported by on-chain metrics. According to the on-chain analytic firm Coinglass, ADA’s Long/Short Ratio was 0.93 at press time, indicating a bearish sentiment among traders.
Additionally, its Futures Open Interest has remained unchanged in the last 24 hours, reflecting neutral interest from traders.
Source: Coinglass
At press time, 51.63% of top traders held short positions, while 48.37% held long positions.
When combining all this data, it appears that bears are currently dominating the asset, which may lead to a significant price decline in the coming days.
At the time of writing, ADA was trading near $0.385 after a price decline of 1.4% in the past 24 hours. Its trading volume declined by 35%, indicating lower participation from traders amid bearish market sentiment.
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