Cardano (ADA) could fall 15%, here’s why
Today, December 22nd, 2024, the entire cryptocurrency market is struggling, while Cardano (ADA) is poised for a significant price drop after creating a bullish trend. Amid this mildly depressed market sentiment, traders and investors seem reluctant to participate in altcoins, according to on-chain analyst firm Coinbase.
Analysis of recent on-chain metrics along with technical analysis suggests a positive outlook for Cardano (ADA). While long-term holders are optimistic, technical patterns indicate short-term bearish trends, as evidenced by significant outflows from the exchange.
Cardano (ADA) technical analysis and upcoming level
According to CoinPedia's technical analysis, ADA looks bearish as it successfully broke out of the head-and-shoulders price action pattern and recently retested that level. This crash-level retest partially confirmed that the ADA was prepared for depreciation.
Based on the technical analysis, there is a high probability that the altcoin can decrease by 15% to reach the next support level at the $0.80 mark. If this sentiment does not change, it will be easier to achieve the ADA's projected target.
Optimistic chain parameters
Despite the bearish technical analysis, long-term holders seem optimistic about ADA, as reported by Coinbase. According to data from ADA spot inflows/outflows, exchanges saw a record $200 million in ADA inflows last week. However, during this period, despite significant price reductions, there is no single revenue stream.
This trend reflects the movement of assets away from the wallets of long-term holders. It suggests that investors are adding and hoarding tokens amid the price collapse, indicating potential momentum and a good buying opportunity.
Current price momentum
At press time, ADA is trading near $0.89, having gained more than 5.5% in the last 24 hours. At the same time, the trading volume decreased by 45 percent, indicating that the participation of traders and investors decreased during the period of inflation.
