Cardano (ADA) price continues to be volatile, maintaining its position in the top 10 largest cryptocurrencies by market capitalization despite falling more than 18% in the past seven days. The recent downtrend has been marked by negative technical indicators, including a death cross on its EMAs and a weak position above the Ichimoku Cloud.
However, there are some signs that the bearish momentum may be slowing, as ADA’s ADX showed a slight decline after peaking earlier in the week.
Cardano’s downtrend remains strong but may be weakening
ADA’s Average Directional Index (ADX) is currently at 27.5, having risen from below 20 on December 19 but down slightly from above 30 in recent days. This ADX fluctuation reflects a change in the strength of Cardano’s current downtrend.
While ADX above 25 typically indicates a strong trend, a slight decline suggests that the downtrend may be losing momentum, although still significant.
ADX measures the strength of a trend, regardless of its direction, on a scale from 0 to 100. Values above 25 indicate a strong trend, while below 20 indicate a weak or non-existent trend. With Cardano’s ADX at 27.5 and trending slightly down, this suggests that while the current bearish momentum persists, its intensity may be fading.
In the short term, this could lead to reduced selling pressure, allowing ADA price to consolidate or even attempt a slight recovery. That will depend on whether buying activity increases to counterbalance the downward trend.
The Ichimoku Cloud displays negative sentiment
The Ichimoku Cloud chart for ADA indicates a downtrend. Price is below the cloud (red and green areas), signaling continued bearish momentum.
The blue conversion line (Tenkan-sen) remains below the red baseline (Kijun-sen), confirming that bearish sentiment prevails in the market. However, the narrowing gap between these lines hints at a possible reduction in downside momentum if prices stabilize more.
The lagging line (green line) is below both the price and the cloud, emphasizing the persistence of the downtrend. Furthermore, the futures cloud (red) indicates continued downward pressure. That happens because the leading span A (green border) is below the leading span B (red border).
These conditions suggest that ADA’s situation is tilted to the downside, with limited signs of an immediate trend reversal unless there is further consolidation.
ADA Price Prediction: Will Cardano Return to $1?
ADA’s EMAs formed a death cross on December 20, with the short-term EMA crossing below the long-term EMA, a typical bearish signal pointing to sustained bearish momentum. If this downtrend continues, Cardano price could face further downward pressure, potentially challenging the support levels at $0.78.
If the bearish pressure continues and $0.78 fails, ADA price could fall further to $0.65 or even $0.519. This would mark a possible correction of up to 42% from current levels.
However, if the trend reverses and bullish momentum builds, ADA price could recover to higher levels, starting from resistance at $0.99 and $1.039.
A break above these levels would signal stronger buying interest and could pave the way for a rally to $1.18. That would represent a potential 31% upside from current levels.