Cardano (ADA) has returned to a bearish trend following its failure to breach the $0.77 resistance. The altcoin has been facing a decline, and recent technical indicators suggest that the bearish momentum could continue.
A surge in negative market signals has contributed to the continued downward movement, potentially pushing ADA below the critical $0.50 support level.
Cardano Investors’ Losses Surge
Currently, Cardano is experiencing the formation of a Death Cross, which marks a significant shift in market sentiment. The 200-day exponential moving average (EMA) recently crossed over the 50-day EMA, signaling the end of the altcoin’s five-month bullish momentum.
This bearish crossover is often seen as a precursor to further price declines, as it suggests that market sentiment is shifting to a more cautious, bearish outlook.
The Death Cross is a classic sign of weakening investor confidence, which has been compounded by poor market conditions. As ADA struggles to regain upward momentum, the bearish trend is likely to persist unless there is a significant change in market sentiment.
Moreover, investors appear to be moving away from ADA, further fueling the decline in its price.
In addition to the Death Cross, the overall macro momentum for Cardano is also showing signs of weakness. The MVRV (Market Value to Realized Value) Long/Short Difference has dipped below the neutral line, indicating that long-term holders (LTHs) are on the verge of losing their profits.
If this trend continues, the profitability of LTHs could shift to short-term holders (STHs), further intensifying the bearish pressure.
A continued drop in the MVRV Long/Short Difference below the zero line would signal that investors’ belief in ADA’s recovery is waning. With LTHs potentially seeing their profits evaporate, there is little incentive for them to hold on to their positions, which could lead to further price declines.
ADA Price Decline Likely
Currently, Cardano’s price is hovering at $0.57, holding above the critical support of $0.54. However, this support is the last line of defense before ADA potentially falls below $0.50. If the price continues its downward trajectory, a drop to $0.50 is a real possibility.
Should the bearish trend intensify, ADA could easily fall through the $0.50 support, extending the losses and pushing Cardano toward $0.46. This would significantly diminish any chances of a recovery and deepen the ongoing downtrend.
The only way to reverse this bearish outlook would be for ADA to secure $0.57 as a support floor. A successful break above $0.63 could restore confidence among investors, which may help avoid further losses and provide a path for recovery.
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