Cardano (ADA) Price at Risk as Bear Flag Signals Potential 20% Correction

Key Takeaways

• Cardano’s price dropped from $1.13 to $0.67, forming a bearish flag pattern.
• The MACD and EMA indicate indecision, making a breakout above $0.81 unlikely.
• A death cross between the 20 EMA and 50 EMA supports a bearish continuation.
• Interested in buying or selling CARDANO ADA? Read our review of the best exchanges to buy and sell CARDANO ADA.

Despite trading above $1 on March 1, Cardano (ADA) nosedived and is now on the verge of extending the less it has faced for weeks. ADA’s initial decline happened after a bearish engulfing candle invalidated the bullish one formed on March 3.

That sudden drawdown dragged Cardano’s price down to $0.86 until it reached $0.67 weeks later.

While the altcoin has bounced to $0.70, the technical setup shows that a recovery to the monthly high is unlikely.

Cardano Likely to Face Breakdown

The daily chart shows ADA’s initial correction and recent consolidation have formed a bearish flag pattern. Typically, this pattern signals a potential continuation of the downtrend that seemed to have taken a break.

As shown below, the flagpole formed when Cardano’s price surged to $1.13 before plunging to $0.67. The flag emerged as ADA consolidated between $0.65 and $0.74.

Following this setup, the Moving Average Convergence Divergence (MACD) hovered around the zero signal line. The MACD measures momentum, and the current reading indicates indecision in the market.

Likewise, the MACD’s Exponential Moving Average (EMA) presents a similar bias. In the image below, the 12 EMA (blue) and 26 EMA (orange) are wobbling around the same point, indicating that ADA’s price might find it challenging to break above the overhead resistance at $0.81.

Selling Pressure Over Accumulation

Furthermore, other indicators like the Chaikin Money Flow (CMF) also seem to agree with this thesis. The CMF measures the flow of capital in and out of a cryptocurrency.

When the reading is positive, it indicates rising accumulation, suggesting that the price might increase. A negative reading, on the other hand, signifies selling pressure.

Want to add CARDANO ADA to your portfolio? Discover the leading platforms for buying and selling CARDANO ADA on our exchange review page.

As of this writing, the CMF rating stood at -0.13, indicating that distribution has outpaced accumulation. Due to this position, Cardano’s price might experience a decline much lower than $0.70 if sustained.

ADA Price Analysis: Respite Uncertain

Alongside the CMF and bear flag setup, the 20 EMA (blue) and 50 EMA (yellow) further support the likelihood of Cardano’s price extending its decline. Looking at the daily chart, the 50 EMA has crossed above the 20 EMA.

When the longer EMA rises above the shorter one, it is called a death cross. If this position remains the same, ADA might not experience relief soon.

Instead, the altcoin’s market value might decline by 20%. If validated, Cardano’s price might drop to the 0.236 Fibonacci level at $0.56.

Contrary to this prediction, if the 20 EMA flips above the 50 EMA, it will form a golden cross—a bullish signal that could invalidate the bearish outlook.

In this case, ADA could surge to $0.82, with a highly bullish scenario potentially pushing its price toward $0.94.