ADA, the native token of the Cardano blockchain, is facing challenges in maintaining its crucial support level amidst the current market uncertainty. As of December 27, 2024, the overall sentiment in the cryptocurrency market is bearish, with major assets like Bitcoin (BTC), Ethereum (ETH), and XRP experiencing price declines.
Cardano (ADA) is currently trading near $0.864, reflecting a decrease of over 6.9% in the last 24 hours. The altcoin has reached a critical level, and if it fails to hold, ADA could potentially drop by 15% and fall below the $0.75 mark. This downward price movement has instilled fear among traders and investors, resulting in a 16% decrease in ADA’s trading volume, according to CoinMarketCap data.
Technical analysis indicates that ADA has recently broken down from a bearish head and shoulders pattern and has been consolidating below the pattern’s neckline for the past week. The recent price decline has brought ADA’s price to the lower boundary of the consolidation zone, signaling a possible breakdown.
If ADA breaches this level and closes a daily candle below the lower boundary of the consolidation zone, there is a high likelihood of a 15% decline, with ADA potentially reaching $0.77 in the near future. However, if ADA manages to hold above the $0.85 level, the bearish scenario may not materialize.
On-chain metrics reveal a mixed sentiment among investors. Long-term holders remain optimistic, while traders appear hesitant to enter new positions. Data from ADA spot inflow/outflow shows a significant outflow of $4.7 million worth of ADA from exchanges, indicating 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 in the last 24 hours.
In conclusion, ADA’s current momentum is facing downward pressure, with the potential for further price declines if key support levels are breached. Investors are advised to closely monitor ADA’s price action and on-chain metrics to make informed decisions in the volatile cryptocurrency market.