Cardano (ADA) continues to struggle within a bearish trend, according to an analysis by Alan Santana, a top crypto analyst and trader. Santana shared insights via X, suggesting that ADA is nearing the end of its correction but still faces further downside pressure.
With Cardano trading within a descending channel and unable to challenge the MA200, the market outlook remains cautious in the short term.
What you'll learn 👉
ADA’s Failure to Challenge MA200 Signals Weakness
Santana’s chart for ADA highlights the 200-day Moving Average (MA200) as a critical resistance level. Despite a recent uptick in price, ADA failed to even approach this key resistance, indicating weak bullish momentum.
The black line on the chart, representing MA200, acts as a ceiling for ADA’s price, which buyers have been unable to breach. Besides, the fact that ADA didn’t challenge this resistance during its latest rally points to a lack of buying strength.
Santana also noted low trading volume during this period, another factor contributing to ADA’s inability to sustain an upward move. Higher volume would be required to support a stronger recovery, but the market currently lacks the momentum needed for such a breakout.
Descending Channel Continues to Dominate Price Action
ADA’s price continues to move within a descending channel, characterized by lower highs and lower lows. This pattern reflects the persistent bearish sentiment surrounding Cardano’s price action.
Santana points out that ADA recently rejected the upper boundary of this channel, signaling the likelihood of another downward move. As the market remains within this channel, ADA could experience additional price drops.
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Key Support Levels and Potential for Recovery
Santana identified several support levels for ADA, with the most important being $0.2200. Intermediate supports at $0.2753, $0.2500, and $0.2366 are likely to be tested as the correction continues. A break below these levels would suggest further declines, with the $0.2200 support acting as a critical point for a potential reversal.
While the analyst believes the correction may be nearing its conclusion, a final leg down is expected before ADA can establish a firm low. Santana expects a long recovery phase to follow, with prices gradually moving back toward 2024 highs, potentially by Q1 2025.
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