Today, December 22, 2024, the overall cryptocurrency market is struggling, while Cardano (ADA) is poised for a notable price decline after forming a bearish price action pattern. Amid this mild bearish market sentiment, traders and investors appear hesitant to participate in the altcoin, according to the on-chain analytics firm Coinglass.
Analyzing recent on-chain metrics alongside technical analysis suggests a fine outlook for Cardano (ADA). While long-term holders show optimism, as evidenced by significant outflows from exchanges, technical patterns indicate potential short-term bearish trends.
Cardano (ADA) Technical Analysis and Upcoming Level
According to CoinPedia’s technical analysis, ADA appears bearish as it has successfully broken down from a head-and-shoulders price action pattern and recently retested that level. This retest of the breakdown level has partially confirmed that ADA is poised for a price decline.
Source: Trading View
Based on the technical analysis, there is a strong possibility that the altcoin could drop by 15% to reach the next support level at the $0.80 mark. If this sentiment remains unchanged, it will be easy for ADA to achieve the predicted target.
Optimistic On-Chain Metrics
Despite the bearish technical analysis, long-term holders seem optimistic about ADA, as reported by Coinglass. According to data from ADA spot inflow/outflow, exchanges have witnessed a significant outflow of $200 million worth of ADA in the past week. However, there has not been a single inflow during this period, despite a notable price decline.
This trend represents the movement of assets from long-term holders’ wallets away from exchanges. It suggests that investors are bullish and accumulating tokens amid the price crash, indicating potential upside momentum and an ideal buying opportunity.
Current Price Momentum
At press time, ADA is trading near $0.89, having experienced a price decline of over 5.5% in the past 24 hours. During the same period, its trading volume has dropped by 45%, indicating reduced participation from traders and investors amid the ongoing price decline.
