Cardano (ADA) may be facing a more pronounced downturn in the coming days as a reliable technical indicator has flashed a bearish signal.
Cardano has exhibited volatility in the last 24 hours as the asset breaks below the $0.6 territory it only recently reclaimed. Data from CoinMarketCap indicated ADA reached as low as $0.5793 within the past day.
Besides, the recent trend has invalidated most of ADA’s gains since the past week, putting its one-week performance at a negative growth rate of 3.64%.
While the current fluctuations may seem moderate, renowned market analyst Ali Martinez suggests that Cardano holders could anticipate more significant declines soon.
In a recent post on X, Martinez highlighted that a sell signal has emerged for ADA on the 3-day time frame chart.
The analyst referenced the TD Sequential technical indicator as the origin of the bearish signal. He underscored that historically when the indicator flashed a sell signal for ADA, the asset experienced declines.
The TD Sequential indicator shows a sell signal on the #Cardano 3-day chart. It's important to note that the last two times this indicator signaled bearish, $ADA experienced a price correction!
If you’re planning to join me in this trade, go to @coinexcom, and sign up using my… pic.twitter.com/huu01fFcrL
— Ali (@ali_charts) February 23, 2024
The chart accompanying the tweet highlighted specific instances where forecasted bearish signals had proven accurate.
One notable example was the volatility Cardano experienced in January, which resulted in its price dropping to $0.4768. This decline followed a bullish rally that had propelled its price above $0.64 in December 2023.
Meanwhile, the analyst did not indicate how low ADA could fall in the projected price correction.
$8 Outlook Remains Intact
In response to Martinez’s bearish signal, a concerned market participant sought clarification regarding his earlier projections of ADA reaching lofty highs such as $0.8 and $8 during this emerging bull season.
The analyst replied that the projections remain valid regardless of the projected price correction.
Notably, Ali Martinez proposed that history could repeat itself with Cardano’s explosive rally occurring earlier than expected.
He anticipates the asset to initially claim the $0.8 territory, with a potential price correction bringing it back to around $0.6 before ultimately rallying by 1,200% to reach $8.