Cardano Price at Risk of 40% Pullback After ‘Trump Trade’ Gains – BlockNews.com
😲 Cardano's price risks a potential 35% decline in November-December period due to a rising wedge pattern formation. The bearish pattern points to a potential breakdown toward $0.513 by the end of December, erasing around 40% of the 'Trump Trade' gains. The weekly chart also supports the sell-off scenario, with the next downside target around $0.476,
- Cardano’s price risks a potential 35% decline in November-December period due to a rising wedge pattern formation.
- The bearish pattern points to a potential breakdown toward $0.513 by the end of December, erasing around 40% of the ‘Trump Trade’ gains.
- The weekly chart also supports the sell-off scenario, with the next downside target around $0.476, aligning with the 200-week EMA.
The price of Cardano’s ADA token has surged 140% in November, largely fueled by Donald Trump’s re-election. However, some metrics suggest a sizable portion of these gains could be erased in the coming weeks.
Technical Analysis Points to Potential 35% Drop
ADA’s price chart is flashing warning signs of potential downside risk, as a bearish rising wedge pattern has formed on the 4-hour timeframe. This technical structure often precedes a trend reversal to the downside.
If ADA breaks below the wedge’s lower trendline, the breakdown could extend as low as the height of the wedge’s widest part. This projects a price target near $0.598 in the short term, and $0.513 in a more extreme bearish scenario through November-December.
Volume Decline Adds Credence to Bearish Setup
Volume has been declining during ADA’s recent climb, another cautionary sign of a fading rally. Patterns like the rising wedge are more reliable when paired with decreasing trading volumes.
ADA’s chart also shows growing divergence between rising prices and a falling RSI, signaling waning upside momentum. The RSI sits at 68, nearing overbought levels above 70, further indicating ADA is overextended and due for a pullback.
source: coingecko
Weekly Chart Also Warns of Potential Sell-Off
A decisive breakout above the wedge’s upper trendline could invalidate the bearish outlook, especially with higher volume. This would open the door to testing the $0.90 resistance level.
However, $0.90 has been a significant distribution area for ADA since April 2022. After testing it as resistance in March 2021 and April 2022, ADA dropped 65-75% each time. This precedent also puts a similar correction in November-December in play.
If so, ADA’s next weekly chart support appears around $0.476, its descending trendline and 200-week EMA. That would represent a 40% decline from current levels. The weekly RSI above 70 adds credence to the long-term correction scenario.
Conclusion
While ADA’s fundamentals may have strengthened due to Trump’s pro-crypto policies, its technical picture has weakened. The charts suggest last month’s powerful rally is nearing exhaustion, with ADA at growing risk of a 35-40% pullback.
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