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Cardano (ADA) Price May Drop 26% According to This Technical Pattern

2 mins
Updated by Ryan James
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In Brief

  • Cardano Price is forming a double-top bearish reversal pattern that is targeting a 26% decline.
  • Whales, which command 94% of the entire daily transaction volume, are pulling back.
  • MVRV shows that ADA is in an optimum condition to accumulate; this sentiment could act as a buffer to the corrections.
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The Cardano (ADA) price is noting the formation of a bearish reversal pattern, according to which a larger-than-expected correction is due for the altcoin.

At the same time, ADA is ripe for the picking, and this sentiment alone could buffer the potential decline.

Whales Are Pulling Back

Whales are one of the most important and influential cohorts for any cryptocurrency since their movements impact price action the most. Such is the case with Cardano, too.

Despite whales holding less than 20% of the circulating supply, their dominance over the daily transaction volume makes them a crucial cohort. Out of the $17.7 billion traded throughout the last 24 hours, these whales conducted about $17.4 billion worth of transactions.

Cardano Whale Transactions.
Cardano Whale Transactions. Source: IntoTheBlock

However, this is much lower than their transactions five days ago when they moved about $23 billion worth of ADA across addresses. This decline exhibits the waning bullishness among whales, which in turn will negatively impact the price action.

ADA Price Prediction: Major Corrections Are on the Way

Cardano’s price can be seen trading at $0.618 at the time of writing, losing the support of $0.619 following a 6% correction today. The third-generation cryptocurrency is witnessing a double-top pattern forming on the daily chart. At the moment, $0.619 forms the breakout point of the pattern.

The double top pattern is a bearish reversal pattern in technical analysis. It is characterized by two consecutive peaks at similar price levels, indicating a potential trend reversal from bullish to bearish. It suggests that buyers are losing momentum, often followed by a downward price movement.

ADA/USDT 1-day chart.
ADA/USDT 1-day chart. Source: TradingView

Per this pattern, the target price of the bearish reversal is established at $0.455, nearly 26% below the breakout point.

Good Opportunity for Investors

While the forecast is bearish, Cardano’s price drawdown has created a rather optimal environment for accumulation. According to the Market Value to Realized Value (MVRV) ratio, ADA is in the opportunity zone.

MVRV is a metric used to compare the current market capitalization to the realized cap. This indicates whether a cryptocurrency is overvalued or undervalued relative to its historical price. The 30-day MVRV at -13.45% means that investors who bought their ADA in the past month are witnessing 13.45% losses at the moment.

Cardano MVRV ratio.
Cardano MVRV ratio. Source: Santiment

This also means that the indicator is in the opportunity zone, ranging between -8% and -18%. Historically, this zone has seen price reversals, making it optimum for ADA accumulation.

The accumulation could, consequently, trigger a bullish reversal, which could, in return, invalidate the bearish thesis by preventing a decline below $0.580.

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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Aaryamann Shrivastava
As a Mass Media (Journalism) graduate, my journey into cryptocurrency journalism has evolved into a distinguished role as an On-Chain Analyst over the past two and a half years. Collaborating with industry-leading media companies like FXStreet, AMBCrypto, and FXEmpire, I’ve delved deeply into the intricate realms of Crypto and Blockchain, crafting over 2,500 meticulously curated SEO-focused articles. Driven by a commitment to excellence, I remain steadfast in delivering the highest caliber...