Cardano (ADA) loses two key levels, risking a 20% crash

Cardano remained under pressure, falling below critical support levels as the cryptocurrency sell-off persisted. 

Cardano token fell to a low of $0.70 on Sunday, down more than 47% from its peak in December of last year.  

Its drop has coincided with that of other altcoins. Polkadot, for example, fell to $4.75, a more than 60% decrease from its December peak. Similarly, Chainlink has plummeted 40% since its December highs. 

Cardano’s crash came at the same time that the crypto sector was gripped by anxiety. The carefully monitored crypto fear and greed index has fallen to the fear zone of 35, indicating that investors are staying on the fence.  

Cardano’s ecosystem is also not performing properly. According to DeFi Llama statistics, the entire value locked in its DeFi ecosystem has decreased to $350 million, making it less valuable than blockchain networks such as Mantle, Cronos, Zircuit, and Berachain.  

Notably, Cardano has a limited market share in the stablecoin business, with a market capitalization of $22.48 million. This is much lower than the market shares of other chains such as Tron, Ethereum, and Near Protocol. 

Cardano’s network is likewise not profitable enough. Data show that the ecosystem’s app revenue was only $1,236, which is a modest sum for a crypto network worth more than $30 billion. Cardano has only 25,460 active addresses.  

The daily chart illustrates that the ADA price has been under pressure for the previous few months, falling from $1.3268 in November to $0.70 now. It has fallen below key support levels, notably the 50% Fibonacci retracement level at $0.80.  

Cardano has now gone below its 200-day moving average of $0.7230. Losing the 200EMA level is sometimes viewed as a major warning flag in technical analysis. In addition, the coin has fallen below the crucial support at $0.7610, which was the lowest swing in December, as well as the double top neckline at $1.1630. A double top is a prominent bearish reversal indicator. As a result, Cardano’s price may remain under pressure, with the next mark to watch being last week’s low of $0.5597. Such a move would result in a 20% drop from the current level. If the price rises over the resistance level of $0.7610, the bearish thesis will be invalidated. 

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