What’s Next for Cardano Price After 25% Weekly Decline?

Cardano price plunged over 10% during Monday’s trading, teasing a bearish breakdown below the psychological $0.3 level. The intensified selling pressure, spurred by a 12% drop in the Japan index and growing recession fears, contributed to a bloodbath in the crypto market. While the bearish momentum softened during U.S. trading hours, major altcoins have yet to show signs of forming a bottom.

Also Read: JPMorgan Cites Buy-the-Dip Opportunity, Crypto Market Recovery Ahead?

Cardano Price Hits Major Support Within Channel Pattern

The daily time frame chart shows a notable correction in Cardano price over the past two weeks. Amid the market correction, the ADA price fell from $0.45 to $0.308, registering a loss of 31.5%, while the market cap plummeted to $11.162.

A deeper technical chart analysis revealed that this downfall contributed to the formation of an expanding channel pattern. The coin price resonating between two diverging trendlines typically indicates market uncertainty and no clear initiation from buyers or sellers.

If the broader market selling persists, the ADA price could tease a bearish breakdown below the lower trendline at $0.28. If successful, the selling pressure will accelerate, plunging the altcoin 15% down to seek support at $0.24.

Additionally, the Global In/Out of the Money (GIOM) metric for Cardano presents a rather bleak outlook. Currently, 28.1 billion ADA tokens are ‘out of the money’ (bought at prices higher than the current market price and thus at a loss), compared to only 5.7 billion tokens that are ‘in the money’ (purchased at lower prices and currently profitable). This imbalance indicates a less stable investor base, potentially leading to heightened susceptibility to panic selling.

Also Read: Bitcoin ETF: Europe’s Capula Management Discloses $500 Mln Holding

Moreover, the number of large transactions has significantly decreased since early July, dropping from 6.5k to 3.02k, registering a 56% decline. This substantial reduction in high-volume trades could indicate waning interest among major investors or a shift towards a more cautious approach in the market.

However, Cardano price currently trades at $0.309 and seeks support at the lower trendline, which previously triggered a 45% rally. A long-wick rejection candle today highlights the presence of demand pressure and potential support for bottom formation.

The daily Relative Strength Index (RSI) has dropped sharply to an oversold position at 26%, potentially enticing dip buyers and setting the stage for a 30% rally to $0.41.

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