Over the last several hours, Cardano has fallen below the $0.50 support level. A definitive closure below such a critical demand zone would put ADA on the verge of a 50% decline below $0.25. The creation of a bear pennant pattern on its 12-hour chart has given it a negative perspective.
Over the last eight hours, the eighth-largest cryptocurrency by market capitalization has dropped 7%. The sharp drop pushed ADA below the crucial $0.50 support level, resulting in almost $1.40 million in liquidations across cryptocurrency derivatives markets. Additional selling pressure around current price levels could enhance the likelihood of a greater decline.
On its four-hour chart, Cardano appears to be breaking out of a symmetrical triangle. When ADA fell below the $0.50 support level, the pattern’s Y-axis indicated that it began a 33.5 percent decline.A four-hour candlestick closing below the 50% Fibonacci retracement line at $0.48 will almost certainly confirm the bearish picture.
As long as ADA trades below $0.55, the odds will likely continue to favour the bears. A four-hour candlestick closing above this resistance barrier, on the other hand, could invalidate the bearish picture. By slicing through this supply wall, the number of buy orders behind Cardano might increase, driving prices closer to $0.61.
In recent weeks, the cryptocurrency market has been dominated by fear, uncertainty, and doubt, with the Fear and Greed Index displaying significant levels of pessimism among market players. Furthermore, on-chain and technical signs indicate that the current bearish sentiment has not yet taken its full toll on Bitcoin, implying that a market bottom is still a long way off. Although it has historically benefited bitcoin investors to invest when sentiment is low, the current conditions appear to be ideal for a steeper decline.
Will you be buying the dip in Cardano?
Read more: Rise in number of ADA wallets on Cardano Blockchain
