ADA, the native token of the Cardano blockchain, is poised to continue its price decline in the coming days. This decline is attributed to ongoing market uncertainty, the formation of bearish price action, and negative sentiment across the cryptocurrency landscape.
As of today, December 31, 2024, the majority of cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), are struggling to gain momentum.
Cardano (ADA) Technical Analysis and Upcoming Levels
According to expert technical analysis, ADA appears bearish in the short term. It has formed a descending triangle price action pattern on the daily time frame and is poised for a breakdown. This pattern has emerged following the breakdown of a bearish head-and-shoulders price action pattern.
Based on historical price momentum, if ADA breaches the support of the descending triangle and closes a daily candle below the $0.825 mark, there is a strong possibility it could decline by 10% to reach the crucial support at the $0.75 mark in the future. However, ADA’s bearish outlook will only hold if it closes a daily candle below the $0.825 level; otherwise, it may fail.
$38 Million ADA Outflow
Despite this bearish outlook, long-term holders have shown strong interest and confidence in the token, as reported by the on-chain analytics firm Coinglass. Data from ADA spot inflow/outflow reveals that exchanges have witnessed an outflow of a significant $37.92 million worth of ADA.
The outflow is a metric that shows how much of an asset has been withdrawn from exchanges to wallet addresses. This metric also indicates potential upside momentum, buying pressure, and an ideal buying opportunity.
In addition to the long-term holders’ participation, traders appear hesitant to build new positions as the price reaches a crucial area and prepares for a breakdown. This hesitation has led to the liquidation of millions worth of long positions, as revealed by open interest. Data shows that ADA’s open interest has dropped by 3.9% in the past 24 hours.
Current Price Momentum
At press time, ADA is trading near $0.8456 and has experienced a price decline of 3.15% in the past 24 hours. During the same period, its trading volume increased by 15%, indicating heightened participation from traders and investors compared to the previous day.
