Cardano has been trading within a rising parallel channel since late June, with ADA prices climbing from $0.138 to $0.282. Recent technical analysis, however, indicates potential weaknesses within this structure, suggesting a decline might be on the horizon.
Technical Breakdown Risks Heighten
Cryptocurrency analyst Ali reports that Cardano appears to have slipped below the lower boundary of its channel, raising the possibility of a deeper correction. Ali emphasizes that the $0.220 level presents a crucial hurdle in the near term.
Ali notes, “If the $0.220 threshold is not surpassed, ADA might face a pullback of approximately 20%, potentially retesting the $0.166 region.”
Additionally, the $0.21 level remains pivotal, aligning with the channel’s lower border. A daily closure below this level could intensify selling pressure and drive prices toward $0.17.
Whale Movements Fail to Influence Direction
In a separate observation, Ali highlighted the behavior of major wallets holding between 100 million and 1 billion ADA. Historically, shifts within this group have coincided with sharp price movements for Cardano. However, over the past ten days, these wallets have shown no significant change.
This stagnation suggests that large holders have yet to make a definitive directional move. Despite the technical indicators suggesting pressure, data from significant wallets currently provide little strong confirmation.
SuperTrend Indicator Flags Bearish Signal
The SuperTrend indicator, another highlight in the analysis, has issued a bearish signal for Cardano. The last occurrence of this signal was on May 22, after which ADA prices plunged by 46%.
Mini Glossary: The SuperTrend is a technical indicator that tracks price movements and volatility. It generally suggests a bullish trend when prices remain below, and a bearish trend when they rise above.
Ali recalls the sharp reversal post-May’s signal, noting, “While history might not repeat itself exactly, the current setup requires close monitoring.”
In the broader cryptocurrency market downturn, Cardano fell 4.03% in the past 24 hours to $0.20. The asset’s weekly loss has reached 6.05%, continuing its downward trend for the third consecutive trading day since October 21.
Positive Development in Cardano’s Test Network
Meanwhile, a positive development emerged on the network side. The public Dijkstra test network, advancing phases towards Cardano’s next major upgrade, has been launched. Known for its research-driven development approach, Cardano manages its updates through phased testing methodologies.
