Cardano Price Prediction: ADA Could Fall 30% As Bearish Patterns Are Confirmed

ADA has now shed nearly a third of its market value since the year started. Although its losses have been milder than those of rival smart contract platforms like Solana (SOL) and Ethereum (ETH), this is still quite a disappointing performance during what should have been supposed to be a great year for cryptos.

The Fear and Greed Index is near its record low of 15, meaning that investors are in Extreme Fear as Trump’s tariffs could result in higher inflation in the near term and could prompt the Federal Reserve to revisit their two planned interest rate cuts for 2025.

In addition, with sentiment so heavily depressed, the demand for risky assets typically dries up as investors rotate to safe havens like gold or even cash.

Another Support Break Could Push Cardano to $0.40

We warned in a recent analysis that last week’s trend line break for ADA risked a 9% drop to the $0.5750 area, which is near where we are right now.

ADA has bounced off this level thus far during the American session as buyers have shown up to scoop up their favorite tokens on Monday.

However, momentum indicators are heavily depressed at this point and a retest of this key level seems highly likely.

The Relative Strength Index (RSI) has now distanced itself by 20% from the signal line, meaning that negative momentum has accelerated.

Meanwhile, the MACD’s histogram has flashed two consecutive dark red negative bars, reflecting that bears are in control of the price action.

Today’s bounce is not unexpected as the price of most digital assets dropped to oversold levels in the RSI in the lower time frames. However, whether this uptick can result in a recovery for ADA in the near term seems unlikely as market sentiment at this point is quite bearish.

Now, the $0.570 level is acting as resistance and ADA is now trapped between a tight zone as the nearest support stands at $0.510.

If the sell-off resumes, which is the baseline scenario at this point, a break below the $0.51 level could result in a 30% drop from current levels as a bearish pennant pattern provides a short-term target based on the pennant’s pole size.

ADA Retraces Off Key Fibonacci Level

Moving to the hourly chart, we can see the tug of war raging at $0.5750 up close. Bulls tried to push the price above the 61.8% Fibonacci retracement but were met by significant selling pressure.

Momentum indicators in this lower time frame are favoring a bullish short-term outlook but with market sentiment being so heavily depressed, going against the trend at this point seems pointless and will likely result in losses.

Traders would be better off waiting for a confirmation of this retrace by a big red candle. If the retrace is confirmed, ADA will likely retest new session lows, possibly later in the afternoon.

Long positions seem to be outpacing shorts in the past 4 hours across the top four exchanges while ADA’s long-short ratio currently stands at 1.04. Given this imbalance, the market could push the price lower to liquidate a portion of these excess longs.

This would favor a push to the $0.5100 level or even lower, which is where most stop-loss orders are probably set.