Cardano’s Price: Falling Like a Tripped Bull

What caused the decrease in Cardano's price today?

Cardano’s price drop what’s up?

ADA/USD four-hour price chart. Source: TradingView

Cardano’s (ADA) price is taking a beating today, falling 7.75% in the last 24 hours to hit $0.55 on Dec. 13. But fear not, my fellow digital asset investors, for this dip may just be a stumble in the corrida de los toros.

Let’s delve into the factors that have sent Cardano prices stampeding in the opposite direction.

Overbought correction: Give the bulls a break!

From a technical standpoint, ADA’s price drop today is nothing more than a necessary correction. Think of it as the bullfighter taking a break after an exhilarating pas de deux with the bull. On October 9, ADA reached its 18-month high of $0.64, leaving traders gasping for breath and locking in profits.

The relative strength index (RSI) on shorter-timeframe charts became “overbought” after crossing 70. Now, an RSI reading above 70 means the asset is strutting its stuff a little too much, like a peacock showing off its extravagant plumage. It’s a sure sign that we might see a trend reversal or corrective pullback.

ADA/USD four-hour price chart. Source: TradingView

ADA is currently pursuing this correction pullback, moving with all the grace of a bull in a china shop. Its limited and range-bound movement inside a triangle structure reflects the market’s indecisiveness. Neither the bulls (buyers) nor the bears (sellers) are currently holding the reins.

ADA supply dwindles among the Big Whales: Bigger is not always better

The drop in Cardano’s price on December 13 coincides with a decrease in the ADA supply held by addresses with a balance of over 1 million units. It seems the big whales are not as interested in ADA as they once were, which is like a titan suddenly losing interest in his collection of tiny pebbles.

ADA supply in addresses with a balance over 1 million units. Source: Messari/CoinShares

Interestingly, these whale addresses have only added a measly 40 million tokens to their collection so far in December, bringing their total ADA supply to a paltry 21.66 billion. This slight movement aligns with Cardano’s 50% price rally in the same period, suggesting that these whales might have some influence (or maybe just some pet dolphins) when it comes to ADA’s short-term price trends.

The Crypto Market Roller Coaster: Hold On Tight!

Cardano is not the only one on this roller coaster ride. The entire crypto market is experiencing a correction from its overbought levels, and ADA seems to be mimicking the same pattern. It’s like a circus carousel, with everyone grabbing for the brass ring.

Traders might be feeling a little queasy due to the recent U.S. consumer price index (CPI) data. The numbers show that the U.S. headline inflation dropped to 3.1% year-over-year (YoY), aligning with forecasts. However, there was a slight uptick in month-over-month (MoM) figures.

This suggests the Federal Reserve might be pumping the brakes on interest rate cuts in the coming months. And what does that mean for ADA and other cryptocurrencies? Well, with a negative correlation between ADA and the greenback, a stronger U.S. dollar might put pressure on Cardano’s value.

Crypto market cap’s daily performance chart. Source: TradingView

Who Said There’s No Light at the End of the Tunnel?

Now, now, my fellow adventurers in the world of digital assets, do not despair. The future for Cardano might just be, dare I say it, bullish!

Cardano’s four-hour chart is teasing us with a pennant structure, hinting at a potential upwards surge. Think of this pennant as a matador’s red cape fluttering in front of a charging bull. As the price breaks above the upper trendline, we may see Cardano rise by as much as the previous uptrend’s height.

ADA/USD four-hour price chart. Source: TradingView

If this bullish pennant pans out, we can expect ADA to reach $0.81 by the end of the year. That’s a potential 40% upside over the next two weeks. So, hold on to your seats and keep those digital wallets ready for action!

On the other hand, if the bears decide to have a dance party and push the price below $0.528, we might see Cardano heading towards the 200-4H EMA near $0.42. But let’s not dwell on that possibility. Let’s stay positive like a cheerleader on steroids!

So, What’s Your Move?

Now that you’ve learned about the factors behind Cardano’s current price movements, it’s time to make your move. Will you bravely hold on to your ADA like a matador facing a charging bull? Or will you decide to take some profits and wait for a better entry point?

Remember, Cardano’s tale is like a telenovela, full of twists and turns. Stay tuned, my fellow investors, as we continue this thrilling and ever-changing journey through the world of digital assets!

By the way, if you have any predictions or thoughts about Cardano’s future, share them in the comments below. Let’s get this conversation going!

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

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