Cardano Price Decline Hits 50% — Past ADA Corrections Indicate Bottom is In

Key Takeaways

• The ADA price has fallen by 50% since reaching a yearly high on March 14.
• ADA’s correction is similar to that in July 2020, followed by a parabolic ADA rally.
• Can ADA initiate a similar rally in the second half of 2024, or are the conditions different?

ADA’s price underwent numerous corrections in the bullish cycle in 2020 before eventually reaching its all-time high. In the current bullish cycle, the first major correction started on March 14 and possibly ended on April 13 with a 22% bounce that is still ongoing.

Analyzing the characteristics of the previous corrections and the wave count of the current one gives insight as to whether the correction is over or if the bounce is merely a relief rally.

Similarities Between ADA’s Previous and Current Corrections

In the bullish cycle that started in 2020, ADA went through four significant price corrections. In order of magnitude, they were decreases of 64%, 55%, 42% and 34%, respectively. The first correction was particularly interesting.

The correction ended 196 days after the ADA price began its upward movement and coincided with an RSI decrease below 70 (red icon). Then, the ADA price validated a long-term horizontal area (green icon) before beginning its parabolic ascent toward its all-time high.

Moving on to the current increase, the ADA price fell by 50% after reaching its yearly high in March 2024. The correction is much the same with that of July 2020. Besides similarities in length, Cardano bounced at a long-term horizontal support area 196 days after beginning its upward movement. Also, the RSI fell below 70.

Despite this resemblance, analyzing the short-term time frame wave count is needed to determine if a similar parabolic increase will follow.

ADA Price Prediction: Is the Correction Over?

On the daily time frame chart, ADA’s price completed a five-wave upward movement (white) beginning on June 10, 2023. This uptrend led to a yearly high of $0.81 on March 14. However, the ADA price corrected for 30 days afterward.

Since the upward trend lasted for 278 days, the 30-day correction is brief compared to it. This is despite the correction reaching the 0.618 Fibonacci retracement support level.

So, it’s plausible this decline is merely the initial phase of a larger A-B-C corrective structure (black).

Even if this is the case, ADA will likely complete wave B of this structure near $0.72 before another downward movement.  The daily RSI and MACD both support this possibility. The RSI broke out from its bearish trend line (green) while the MACD made a bullish cross (green icon).

However, a daily close below $0.46 poses a risk to the current wave count and may trigger a deeper retracement towards $0.35.

ADA Could Rise in the Second Half of 2024

To conclude, the magnitude of ADA’s correction is sufficient relative to the previous ones to indicate the correction is complete. However, the time duration is not. Due to these characteristics, it is possible the ADA price is in a relief rally toward the $0.72 region before another drop.