It appears that ADA, the native token of the Cardano blockchain, is facing difficulties in maintaining its crucial support level amidst market uncertainty. On December 27, 2024, the overall sentiment in the cryptocurrency market seems to be experiencing a price decline, impacting major assets like Bitcoin, Ethereum, and XRP. This shift in market sentiment towards a downtrend has significantly affected ADA’s current momentum.
As of now, ADA is trading near $0.864, with a price decline of over 6.9% in the past 24 hours. The altcoin has reached a critical level, and if this level fails to hold, it could potentially drop by 15%, falling below the $0.75 mark. This bearish price action has instilled fear among traders and investors, resulting in a decrease in trading volume. Data from CoinMarketCap indicates that ADA’s trading volume has decreased by 16% in the past day.
Expert technical analysis reveals that ADA has recently broken down from a bearish head and shoulders price pattern. Over the past week, it has been consolidating below the pattern’s neckline. With the recent price decline, ADA’s price has reached the lower boundary of the consolidation zone and is at risk of breaking down further in the future. If the altcoin breaches this level and closes a daily candle below the lower boundary of the zone, there is a strong possibility of a 15% decline, reaching the $0.77 mark.
For the bearish thesis on ADA to hold true, it would need to close a daily candle below the $0.85 level, which marks the lower boundary of the consolidation zone. Otherwise, the bearish scenario may not materialize. Despite this bearish outlook, long-term holders seem optimistic, while traders appear hesitant to establish new positions. On-chain metrics suggest that exchanges have seen a significant outflow of $4.7 million worth of ADA, indicating potential accumulation and buying pressure. However, traders seem to be liquidating their positions, as shown by an 8.2% drop in ADA’s open interest within the past 24 hours.
