Death cross pulls ADA fall to the lowest level since November

Cardano (ADA) is facing a sharp decline amid increased volatility and a widespread wave of liquidations across the crypto market. In the past 24 hours, ADA has lost over 14% of its value, marking one of the largest single-day declines in recent times.

In the past day, the price has dropped to a low of $0.51 – the last time recorded was in November 2024. This further reinforces the increasing bearish sentiment.

Death c****ross and the massive outflow negatively impacts ADA

The recent decline of ADA over the past day has pushed the price into a dangerous zone as a death cross appears on the daily chart. This is the first time this pattern has formed on ADA’s chart since May 2024.

Death cross on the ADA price chart | Source: TradingViewThe death cross occurs when the (MA) 50-day moving average falls below the 200-day moving average, which is seen as a long-term bearish signal, often appearing before prolonged price weakness.

When a death cross forms, it signals a significant shift in market sentiment from bullish to bearish, leading to increased selling pressure and potentially causing prices to continue to decline. This indicates that ADA is likely to face continued downward pressure in the near future if the bulls remain weak.

Moreover, the stable outflow of capital from the ADA spot market is increasing downward pressure. According to Coinglass, outflows from the ADA spot market have reached 12 million dollars to date.

In the past month, this figure has surpassed 150 million dollars.

Inflow/Outflow on the ADA Spot Market | Source: CoinglassContinuous outflow from the spot market indicates bearish sentiment, as investors are withdrawing capital to hedge against the next potential downturn or reallocating funds to other assets.

This trend signals that ADA traders are losing confidence as they continuously liquidate positions, increasing selling pressure in the market and significantly contributing to the difficulties of ADA’s price.

Death cross ADA threatens further decline

While the general instability of the market has affected many altcoins, the price decline of ADA is particularly noteworthy due to the formation of a death cross. The appearance of this technical indicator combined with the low price over several months as buying activity diminishes indicates that ADA is facing continued downward pressure in the short term.

In that scenario, the price of ADA could drop to $0.44, marking a 14% decrease from its current value.

ADA 1-Day Price Chart | Source: TradingViewOn the other hand, if there is new demand, the bearish outlook will be invalidated. In that case, ADA could regain what it has lost and attempt to break through the resistance level of $0.54.

If successful, the price could continue to rise to $0.64.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making any decisions. We are not responsible for your investment decisions.

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Minh Anh

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