Cardano (ADA) is showing increasingly bearish signals as technical analysis suggests a potential drop to the $0.40 price level. This comes amid broader market turbulence, with the crypto market experiencing a 5% plunge as Bitcoin tests critical support levels.
Technical Analysis Reveals Bearish Structure
According to prominent analyst RLinda’s analysis on TradingView, ADA/USDT is displaying a concerning price structure that could lead to significant downside movement. The analysis, based on 4-hour candlestick data, identifies several critical price levels that traders should monitor:
- Current resistance: $0.63 (previous support turned resistance)
- Critical support: $0.581 (key trigger level)
- Secondary support: $0.5092
- Target zone: $0.40-$0.42
Market Structure and Fibonacci Analysis
The technical setup shows ADA has been forming lower highs since March 26, with the 0.5 Fibonacci retracement level adding additional resistance pressure. The price action suggests a classic liquidity retest pattern following a period of sideways consolidation between March 11 and May 6.
Broader Market Context
The bearish outlook for Cardano comes amid significant market volatility, partially triggered by recent developments in the global markets, including Trump’s tariff announcements that sent Bitcoin plunging to $76K. This macro uncertainty has created additional selling pressure across the cryptocurrency market.
Key Support Levels and Trading Implications
Traders should watch for these critical price levels:
| Price Level | Significance |
|---|---|
| $0.581 | Primary support – breach could trigger cascade |
| $0.5092 | Secondary support – weak buying pressure expected |
| $0.4564 | Initial target in bearish scenario |
| $0.40 | Final target zone |
FAQ
What is causing Cardano’s bearish outlook?
Technical analysis shows a combination of lower highs, failed support levels, and broader market uncertainty contributing to bearish pressure.
Where is the next major support for ADA?
The critical support level lies at $0.581, with secondary support at $0.5092.
What could prevent further price decline?
A significant shift in broader market sentiment or strong buying pressure above $0.581 could help stabilize the price.
Investors should maintain strict risk management practices given the current market conditions and potential for increased volatility.