Cardano (ADA) has experienced a sharp decline in price over the past seven days, dropping below the $0.41 mark. This decrease is part of a larger trend affecting many altcoins, which have been negatively impacted by Ethereum’s recent significant downturn.
The current decline in ADA’s price is seen as a correction from a previous bullish trend that started earlier in the month. During this bullish run, ADA holders enjoyed substantial gains. However, the recent fluctuations have established critical support and resistance levels for ADA, which investors must closely monitor in the days ahead.
Analyzing Cardano’s current price movement, it is evident that the cryptocurrency is consolidating after a strong bullish phase. ADA surged from $0.3213 to $0.4545 within a week, marking a remarkable 41.5% increase. The $0.45 level acted as a strong resistance point, leading to a consolidation phase between $0.45 and $0.40, followed by a recent breakdown below the support level.
A technical analysis by a cryptocurrency expert suggests that the consolidation pattern might resemble a bullish flag, indicating a possible breakout above $0.45 could propel ADA’s price to $0.6. This forecast implies that ADA could rebound from its current support level and resume its upward momentum in the near future.
Conversely, a downside breakout could push ADA’s price as low as $0.32, potentially erasing all the gains made earlier in the month. Nevertheless, the likelihood of such a drastic decline in the short term seems low, given ADA’s current price hovering around $0.40.
According to blockchain analytics firm Santiment, Cardano (ADA) is one of three cryptocurrencies with significantly negative funding rates on major exchanges. Although this may seem concerning, the negative funding rates could actually lead to a price boost through the liquidation of short positions. Over the past five weeks, Cardano has been consistently shorted, and any liquidation resulting from a minor price increase could trigger a substantial surge in price.
One potential catalyst for an upward price movement could be the highly anticipated Chang Hard Fork upgrade to the Cardano blockchain. This upgrade could generate investor excitement and drive ADA’s value on an extended surge above $0.6, providing a significant boost to the cryptocurrency’s price.
Overall, while Cardano (ADA) is currently experiencing a decline in price, there are indications of potential upside movements in the near future. Investors should closely monitor the support and resistance levels, as well as upcoming developments such as the Chang Hard Fork upgrade, to gauge ADA’s future price trajectory.