Cardano Faces Potential Price Correction After November Surge
đČ Cardanoâs price has risen by 140% in November, fueled by market optimism. Technical indicators suggest a possible 35% drop, with $0.513 as a downside target. Declining volume and bearish patterns raise concerns about sustainability of ADAâs rally. Cardanoâs ADA token has seen remarkable growth this month, surging by 140% to $0.8341. This rally has been
- Cardanoâs price has risen by 140% in November, fueled by market optimism.
- Technical indicators suggest a possible 35% drop, with $0.513 as a downside target.
- Declining volume and bearish patterns raise concerns about sustainability of ADAâs rally.
Cardanoâs ADA token has seen remarkable growth this month, surging by 140% to $0.8341. This rally has been partially attributed to Donald Trumpâs reelection and his administrationâs anticipated crypto-friendly policies. However, analysts caution that technical signals point to a potential correction in the near term.
Bearish Patterns and Weakening Momentum
On the four-hour chart, Cardano is forming a ârising wedge,â a bearish pattern that often signals a trend reversal. If ADAâs price breaks below the lower boundary of this wedge, it could fall as low as $0.598 in a short-term scenario, with a more extreme target at $0.513. Both levels align with significant support areas, including the 200-4H exponential moving average (EMA).
According to TradingView data, trading volume has declined during ADAâs recent price surge, adding weight to the bearish outlook. This divergence between rising prices and falling volume suggests weakening buying momentum. Additionally, the relative strength index (RSI) has reached 68, close to the overbought threshold of 70, further indicating that ADAâs upward trend may soon lose steam.
Source: TradingView
Weekly Chart Signals Larger Correction Risks
The weekly chart provides additional bearish signals, with $0.90 identified as a key resistance level. Historically, ADA has struggled to maintain gains above this level, experiencing significant drops of 65%-75% after testing it in March 2024 and April 2022. If a similar correction occurs, ADA could target support near $0.476, marked by the 200-week EMA.
The weekly RSI, now at 77 and firmly in overbought territory, supports the possibility of a long-term correction. Analysts suggest that a sustained rally would require a breakout above the wedge pattern with increased trading volume, which could pave the way for testing $0.90 and beyond.
While Cardanoâs fundamentals may improve under a pro-crypto regulatory environment, the current technical setup underscores the risks of a short-term pullback as traders remain cautious about ADAâs next move.
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