ADA, the native token of the Cardano blockchain, is poised to continue its price decline in the coming days. This decline is attributed to continued market uncertainty, the formation of bearish price action, and negative sentiment in the cryptocurrency landscape.
As of today, December 31, 2024, most 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 triangular price action pattern on the daily time frame and is on the verge of a collapse. This pattern emerged after the breakup of a bearish head-and-shoulders price action pattern.
Based on the historical price momentum, if ADA breaks the descending triangle support and closes a daily candle below $0.825, there is a strong possibility that the price will fall by 10% to reach the crucial support at $0.75 in the future reaches. 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 Mint glass. Data from ADA spot inflows/outflows shows that the exchanges have witnessed outflows of a significant $37.92 million in ADA.
Outflows are a measure of how much of an asset has been withdrawn from exchanges to wallet addresses.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 participation of long-term holders, traders appear reluctant to build new positions as the price reaches a crucial area and prepares for a collapse. This hesitation has led to the liquidation of millions of long positions, as reflected in open interest. Data shows that ADA’s open interest fell 3.9% in the last 24 hours.
Current price momentum
At the time of writing, ADA is trading around $0.8456 and has experienced a price drop of 3.15% in the last 24 hours. During the same period, trading volume increased by 15%, indicating greater participation from traders and investors compared to the day before.
