Cardano: a bearish signal that could crash the ADA price by 40%

The Cardano (ADA) rate sank significantly for the week of December 11-18, although there was no negative news behind this fall. At the same time, bullish divergence signals on the daily RSI were neutralized on the chart, which were the only potential positive signal for the coin. The other day, Cardano founder Charles Hoskinson announced that he would no longer discuss topics related to Ripple or XRP. He tweeted that XRP has no partnership or technical value and added that the Ripple community is toxic and petty. “Never in my career in this field have I come across a community so viciously attacking a person who, quite frankly, has done them no harm,” he lamented. However, at the moment this is the only news that has something to do with the Cardano project. Cardano breaks important support According to the results of technical analysis, the price of the ADA coin reached an all-time high of $3.107 in August 2021 and has been declining since then, moving along a descending resistance line. As a result, in December 2022, the coin formed a low of $0.255. In addition, the ADA has made a bearish breakout of the long-term horizontal support area of $0.350. Now this level can become resistance. Now the next line of defense is support around $0.150. A drawdown in this area would mean a price drop of almost 40% from current levels. During the current decline, Cardano also canceled potential bullish divergence signals on the daily RSI (green line), which were the only potential positive signal for the coin amid bearish price action. Thus, the most likely scenario for ADA involves a fall in the price of the coin towards the $0.150 support area.. Only a bullish breakdown of the descending resistance line and a price recovery above the $0.350 area will be able to signal a trend change to bullish. Source: TradingView No bottom in sight Daily chart also confirms bearish outlook. On December 16, the Cardano rate (red icon) broke through the descending support line and the support level at $0.286 (Fibo level 1.61 of the external correction of the previous rebound). This is the last line of defense before $0.150. Thus, its loss can provoke an acceleration in the rate of price decline. ADA bearish break sends daily RSI to 25, deep into oversold zone. Previously, these low RSI readings were associated with a bottom (green circles). However, as mentioned above, the coin does not give any other bullish reversal signals.. The RSI alone will not be enough to trigger a market reversal. The current bearish outlook will be neutralized if the price recovers above the support line and the $0.286 support area. Source: TradingView Thus, the outlook for Cardano is bearish in terms of both price action and technical indicators. Accordingly, the most likely scenario is a continuation of the decline. On the other hand, a recovery above the $0.285 support area would be the first signal of a potential bullish reversal. However, ADA needs to recover above the $0.350 area to confirm such a bullish reversal.. Since the price is not giving any bullish signals at the moment, some good fundamental news about Cardano could trigger a potential reversal. The BeInCrypto editors also shared the results of a fresh on-chain analysis of bitcoin (BTC).Disclaimer All information contained on our website is published on the principles of good faith and objectivity, as well as for informational purposes only. The reader is solely responsible for any actions taken by him on the basis of information received on our website.