Cardano rose 15% following a breakout from a falling channel but failed to break through resistance at $0.84. A bearish engulfing candle now suggests the possibility of a deeper correction.
As altcoins continue to climb, while Bitcoin holds steady around $110,000, Cardano has posted a modest 2.6% gain over the past 24 hours. However, despite holding above $0.80, a short-term pullback warns of a potential steeper correction as ADA reverses from a key resistance level.
Cardano Price Analysis
On the 4-hour chart, Cardano displays a double-bottom reversal from $0.7225, confirming a breakout from a falling channel pattern. The resulting rally led to a 15% gain, peaking at the critical $0.84 supply zone.
Currently, Cardano is down nearly 4% over the past four hours, failing to break above the $0.84 resistance level and forming a bearish engulfing candle. This suggests bullish exhaustion and a likely deeper pullback.
Supporting the bearish outlook, the 4-hour RSI has dropped sharply from the overbought region, reflecting a sudden decline in bullish momentum. However, the MACD and signal lines remain in a positive trend, with bullish histograms still intact, indicating a lack of clear bearish crossover.
According to trend-based Fibonacci levels, the failure to hold above the 50% Fibonacci level at $0.8253 signals a potential trend reversal. The bearish engulfing candle also highlights increased selling pressure.
Price action indicates mild support near $0.7745, followed by stronger support at $0.7225.
Cardano Bullish Positions Worth $943K Wiped Out in 4 Hours
As Cardano experiences a steeper correction, long liquidations in the past four hours have totaled approximately $943,000. Additionally, the funding rate has sharply dropped from a peak of 0.0212% to 0.0107%, reflecting a significant decline in bullish sentiment among derivative traders.
Despite rising bearish sentiment, open interest remains steady at $972 million, with a 3.76% increase in the past 24 hours. This suggests that trading activity continues to grow despite short-term market volatility.
ADA Records 30% Quarter-on-Quarter Growth in Stablecoin Market Cap
Looking beyond the short-term correction, the on-chain analytics platform Messari recently highlighted strong growth metrics for the Cardano network. With increasing DRep (Delegation Representative) participation, the stablecoin market on Cardano has grown by 30%, while the DeFi diversity score has risen by 13%.
The report also notes a 5% increase in Cardano’s treasury balance (in ADA), signaling growing ecosystem support. As the Cardano network expands, rising demand for ADA could support a rebound in spot prices.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
