Cardano Price Surge Faces Correction Risk: 35% Drop Possible for ADA

Cardano Price: Will ADA Face a Major Correction After November Surge?

Cardano Price– Cardano (ADA) has experienced a remarkable surge of 140% in November, driven largely by the speculation surrounding Donald Trump’s reelection as the United States president. However, despite the recent bullish momentum, certain technical indicators suggest that the current gains could face a significant correction in the near future.

ADA Faces Potential 35% Correction Due to Bearish Patterns

Despite the impressive price rally, ADA’s technical chart signals potential risks for a downturn. The formation of a “rising wedge” pattern on the four-hour chart, marked by upward-sloping converging trendlines, suggests the possibility of a trend reversal. This bearish formation typically signals that the current price trend may be losing momentum and could eventually flip to the downside.

If ADA breaks below the lower trendline of the wedge, the price could fall by an amount equal to the width of the wedge, potentially pushing ADA to a short-term target near $0.598. In a more extreme bearish scenario, the price could drop to around $0.513, representing a 35% decrease from current levels. Notably, this price target aligns with the 200-4H exponential moving average (EMA), which provides additional bearish confirmation. The declining volume during ADA’s recent rally and the bearish divergence between rising prices and a falling Relative Strength Index (RSI) further reinforce the risk of a potential correction.

Weekly Chart Confirms Long-Term Selling Pressure

ADA’s weekly chart also supports the possibility of a sell-off, especially if the price fails to break above the wedge’s upper trendline. A breakout above this trendline, particularly with strong volume, could negate the bearish outlook and open the door for testing the $0.90 resistance level. This resistance aligns with the 0.236 Fibonacci retracement trendline, a critical level ADA has tested multiple times since April 2022.

If ADA fails to break through this resistance, it could face a significant downside. Historical patterns show that ADA dropped 65%-75% after testing this level in the past, suggesting that a similar price correction could be in store for November-December. If this happens, ADA’s next target could be its support-turned-resistance trendline, around $0.476, which is roughly 40% below the current price.

Trump’s Re-election May Offer Long-Term Bullish Support

On a positive note, Cardano’s fundamentals have strengthened in the wake of Trump’s reelection. Trump’s administration has signaled that it will avoid heavy-handed crypto regulations, which could increase demand for cryptocurrencies like ADA in the coming years. While the near-term outlook may be bearish due to technical indicators, the long-term outlook for Cardano could remain positive as regulatory concerns subside and investor confidence grows.

In conclusion, Cardano is facing significant technical headwinds in the short term, with a potential 35% correction looming. However, the ongoing political developments and potential regulatory shifts may provide a foundation for future growth, making Cardano a cryptocurrency to watch closely in 2025.