Top crypto analyst Alan Santana has shared a technical analysis of Cardano (ADA), highlighting potential bearish signals that could lead to a correction in the asset’s price. Additionally, Santana’s analysis is based on Cardano’s weekly chart, which shows five consecutive weeks of downward price action.
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Weekly Chart Paints a Bearish Picture
According to Santana, the five consecutive red weekly candles can be interpreted as a bearish move unfolding or a potential reversal from an uptrend. Significantly, the analyst notes that the same low around $0.5800 has been serving as support for the past five weeks, and the price has now broken below this level, giving a bearish signal.
Santana raises the question of how deep a potential correction could go for Cardano. He notes that the asset has already experienced a 30% decline from its recent peak prices, and this correction might be the extent of the pullback.
However, based on a study of around 150 altcoin charts that had already grown 2-3x beyond 100%, Santana found that these altcoins, without exception, corrected to test a price range between the 0.618 and 0.786 Fibonacci retracement levels for the entire move since the 2023 low (or 2022 low in some cases).
Potential Support Range for Cardano
Moreover, Applying this methodology to Cardano (ADA/USDT), Santana projects a potential support range between $0.4444 and $0.3450 for the current correction.
While acknowledging the possibility of Cardano continuing to rise before a deeper correction, Santana suggests that the asset has been lagging behind other altcoins, making it more likely to continue lagging rather than catching up in the current cycle.
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Show more +Technical Indicators Signal Bearish Bias
On the weekly chart, furtermore, Cardano has produced a strong bearish candle, breaking below the EMA10 (10-week Exponential Moving Average), with the RSI (Relative Strength Index) turning red. Santana interprets these technical indicators as a signal to remain bearish until the chart and market conditions change and support is established.
While Santana’s analysis suggests a bearish bias for Cardano in the short term, he also emphasizes the importance of diversification and considering various investment choices, as some assets may move faster or higher than others during different market cycles.
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