ADA Analysis: Price Drops 18%, Bearish Signals Dominate

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The price of Cardano (ADA) has decreased by 30% in one month and around 18% in the past two weeks. Its market capitalization has now dropped to $27 billion, reflecting the general weakness of Altcoins.

Technical indicators, including a rising ADX and a declining Ichimoku Cloud, suggest that the current downtrend of ADA is strengthening. With critical support at $0.519 and the potential to drop to $0.32, ADA needs a strong reversal to regain the $0.78 level and move towards $1.

ADX shows the current downtrend is very strong

Cardano's ADX has risen to 44, up from just 11.2 three days ago, signaling a significant increase in trend strength. As ADX measures the strength of a trend without indicating the direction, this surge confirms that the current price movement of ADA is accelerating. Since ADA is in a downtrend, this rising ADX indicates that the selling pressure is increasing rather than weakening.

ADA ADX.ADA ADX. Source: TradingView.

ADX values above 25 indicate a strong trend, while readings above 40 suggest an even more dominant market movement.

With ADA's current ADX at 44, the downtrend appears to be firmly established, making a reversal less likely unless there is a significant change in buying activity. If the selling pressure continues, ADA may face further declines, with lower support levels in focus.

ADA's Ichimoku Cloud signals a bearish scenario

Cardano's Ichimoku Cloud setup confirms a strong downtrend. Prices are trading well below the cloud, a clear sign of bearish momentum. The future cloud is also turning bearish, suggesting that selling pressure is likely to continue. Additionally, the Tenkan-sen (green line) remains below the Kijun-sen (red line), reinforcing the short-term bearish outlook.

ADA Ichimoku Cloud.ADA Ichimoku Cloud. Source: TradingView.

For ADA to reverse this trend, it needs to break above the cloud and establish it as support. However, with the Chikou Span (green line) trailing far below the price action and the cloud expanding, the bearish momentum remains strong. Unless buying volume increases significantly, ADA may struggle to regain critical resistance levels and could continue to face downside risks.

ADA Price Prediction: Can it reclaim $1 this week?

Cardano's price is currently facing resistance at $0.78 and support at $0.519. If the current downtrend continues and ADA loses this support, the next critical level to watch is $0.32, marking the lowest price since late November 2024. With strong bearish momentum, a break below $0.519 could accelerate the decline.

ADA Price Analysis.ADA Price Analysis. Source: TradingView.

However, if the broader Altcoin market starts to recover, Cardano may attempt to regain the $0.78 level. A successful breakout above this could push it to $0.87, and if the momentum continues, ADA could reach $1, representing a potential upside of 40.8%. For this scenario to unfold, a significant increase in buying pressure is needed.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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