Cardano’s native token is among the top-performing cryptocurrencies on a monthly scale, with its price rallying by 15% within that period.
However, the bulls seem to have lost momentum, while popular analyst Ali Martinez outlined some important factors that could trigger a major short-term decline.
Going Down Again?
ADA started August on the right foot following the return of the large investors who scooped up more than 240 million coins in less than a week. Its price eventually pumped to almost $0.21 (the highest mark since early June) before retracing to the current $0.187 (per CoinGecko).
Meanwhile, Martinez believes a much more substantial plunge could be on the way. The analyst revealed that the number of whales holding between 1 million and 10 million ADA has fallen from 2,370 to 2,340, saying:
“This suggests some large holders may be taking profits or redistributing after the recent price increase.”
His second concerning signal is the formation of a death cross between Cardano’s MVRC ratio and its 7-day simple moving average. He claimed that the shift points to weakening momentum and raises the risk of a deeper correction. Last but not least, Martinez paid attention to ADA’s TD Sequential indicator, which has printed a sell signal on the asset’s daily chart.
“If these warning signs are confirmed, ADA could decline toward $0.17, the channel’s mid-range support. A further breakdown could expose the lower boundary near $0.144,” he concluded.
More Factors to Consider
Just a few days ago, the leading digital asset manager Grayscale withdrew its ETF filing for three altcoins, including Cardano’s native token. Bulls have long anticipated the launch of such a product, hoping it would boost demand and potentially lift the price, but it’s now clear they will have to wait even longer.
At the same time, there are some positive signals, too. Over the past several days, ADA exchange outflows have surpassed inflows, suggesting that investors have been shifting from centralized platforms toward self-custody, thereby reducing immediate selling pressure.
In addition, the asset’s Relative Strength Index (RSI) has dropped to 25, which means extreme oversold territory. Such levels are typically interpreted as buying opportunities, while anything above 70 is considered a warning of an incoming pullback.
The post ADA’s Rally Hits a Wall: Analyst Warns a 25% Drop Could Be Next appeared first on CryptoPotato.
Source: https://cryptopotato.com/adas-rally-hits-a-wall-analyst-warns-a-25-drop-could-be-next/
