Cardano Could Surge Before A Slump: Analyst Shares Crucial ADA Support

Vignesh Karunanidhi
Cardano Weekend Price: How High Can ADA Go?
Source: Crypto News

Cardano (ADA) has been the subject of intense scrutiny by crypto analysts and investors alike. In a recent technical analysis, Alan Santana, a respected market analyst, shared crucial insights into Cardano’s potential price trajectory. He highlighted the possibility of a surge before a slump and identified key support levels that could determine the asset’s future performance.

According to Santana’s analysis of Cardano’s weekly timeframe, the cryptocurrency has experienced five consecutive weeks of downward movement. Santana interprets this in two ways: either a reversal is imminent, or the bearish move is still developing and gaining momentum.

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Cardano Breaking Support at $0.5800 Raises Concerns

One of Santana’s most significant observations is that the $0.5800 level has been acting as a support for Cardano for the past five weeks. However, the recent breaking of this support level has sent a bearish signal to the market, raising concerns about the extent of a potential correction.

The analyst points out that the current decline has resulted in a 30% drop from Cardano’s recent peak prices. While this correction may be sufficient, Santana has conducted extensive research on over 150 altcoin charts to determine the typical size of corrections for assets that have grown 2–3 times beyond the 100% mark.

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Based on Santana’s analysis, all the altcoins that completed their corrections without exception moved to test a price range between the 0.618 and 0.786 Fibonacci retracement levels for the entire move since their respective 2023 lows (or 2022 in some cases). This method, which is typically used to project targets for bullish waves, can also be applied in reverse to estimate potential support levels during a correction.

For Cardano (ADA), the support range based on these Fibonacci levels would be between $0.4444 and $0.3450. While the asset could potentially move higher before experiencing a deeper correction, Santana notes that Cardano has been lagging behind other cryptocurrencies, making it more likely to continue this trend rather than catch up.