Cardano price positions itself for a steep correction as ADA bulls disappear – FXStreet

Akash Girimath Akash Girimath

Cardano price is consolidating inside a bearish setup that is due for a breakdown soon. If the bears shatter one crucial level, it will trigger a crash that will knock ADA down to levels last seen six months ago.
Cardano price has set up four lower highs and four equal lows since December 7. Connecting these swing points using trend lines reveals a descending triangle setup in play. This technical formation forecasts a 17% downswing, obtained by adding the distance between the first swing high and swing low to the breakout point at $1.20. 
The threat of a crash builds up as Cardano price trades around the apex of the triangle at $1.24. A four-hour candlestick close below $1.20 will indicate a breakdown and trigger a 17% downswing to $1. However, investors need to note that the support level at $1.15 will play a vital role in defending the incoming crash. If the selling pressure overwhelms, ADA will head straight to the next support floor at $1.02, present in the proximity of the theoretical target at $1.
ADA/USDT 4-hour chart
ADA/USDT 4-hour chart
Supporting this crash for Cardano price is IntoTheBlock’s Global In/Out of the Money (GIOM) model, which shows that a strong support level is present at around $0.977. Here, roughly 3890,000 addresses that purchased roughly 5.76 billion ADA are “In the Money” and are likely to buy more if ADA heads lower.
Moreover, the 552,690 addresses that purchased 10.19 billion ADA at an average price of $1.27 are “Out of the Money.” These holders might offload their holdings and serve as a source of selling pressure if ADA rises higher. 
Lastly, the number of large transactions worth $100,000 or more has dropped from 8,870 to 2,880 over the past month. This 67.5% decline suggests waning interests from high networth or whale investors.
ADA large transactions
ADA large transactions
While things are going against Cardano price, a decisive four-hour candlestick close above $1.30 will alleviate any short-term selling pressure and create a higher high, invalidating the bearish thesis.
In such a case, investors can expect ADA to rally to retest $1.45 before tagging the $1.51 hurdle.

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