Cardano (ADA) is facing challenges in maintaining its crucial support level as the overall cryptocurrency market sentiment experiences a decline. Major assets like Bitcoin (BTC), Ethereum (ETH), and XRP are also seeing price drops.
ADA is currently trading near $0.864, with a decrease of over 6.9% in the past 24 hours. If the current support level fails to hold, ADA could drop by 15% and fall below the $0.75 mark. This decline has caused fear among traders and investors, resulting in a 16% decrease in ADA’s trading volume.
Technical analysis shows that ADA has broken down from a bearish head and shoulders pattern and is on the verge of a breakdown. If ADA breaches the lower boundary of the consolidation zone and closes a daily candle below it, there is a strong possibility of a 15% decline, reaching the $0.77 mark.
However, ADA’s bearish scenario will only be confirmed if it closes a daily candle below the $0.85 level. Otherwise, the bearish prediction may not materialize.
Despite the bearish outlook, long-term holders of ADA remain optimistic, while traders hesitate to establish new positions. On-chain analytics firm Coinglass reports a significant outflow of $4.7 million worth of ADA from exchanges, suggesting potential accumulation and buying pressure.
On the other hand, traders have been seen liquidating their positions, leading to an 8.2% drop in ADA’s open interest within the last 24 hours.
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