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While Cardano (ADA) recently benefited from the latest market recovery, multiple analysts are recommending a short position on ADA, projecting a potential decline to the $0.20 range.
On Monday, ADA rallied to $0.3484, recovering approximately 11% after having dropped to $0.3147 just three days earlier. However, these gains are quickly fading as Cardano struggles to maintain its upward momentum.
At press time, ADA is teetering near the critical $0.330 level, following a 3.09% decline over the past 24 hours. This downward shift adds to concerns, with analyst Lingrid reaffirming the bearish outlook.
Analysts Recommend Shorting ADA
In a recent update, Lingrid emphasized that ADA is showing signs of weakness as it consolidates below the key $0.35 resistance level. The analyst noted that the broader crypto market is moving sideways, and ADA’s inability to break out of its current range suggests increasing downward pressure.
Lingrid observed that ADA is trapped in a range between $0.30 and $0.34 on the daily timeframe. A doji candle has formed on the daily chart, indicating market indecision. According to Lingrid, this could lead to a retest of support levels around $0.325 as the market seeks stability.
While the sentiment remains bearish, the consolidation may present opportunities for traders as the price stabilizes within the current range.
However, according to Lingrid’s analysis, if ADA fails to hold above the $0.325 support, it risks falling further toward the $0.30 zone. Ultimately, Lingrid issued a short signal for ADA.
Another Expert Targets a 33% Collapse to $0.2
In a separate commentary, analyst FinancialFreedomGoals also pointed out a strong bearish outlook for ADA, noting that most altcoins, including Cardano, are stuck in a downtrend.
Recently, ADA broke out of its rising wedge with increased trading volume, but it was not the bullish breakout many had anticipated.
According to the analysis, Cardano remains stubbornly below the 200-EMA line on the daily chart, reinforcing the bearish sentiment. Moreover, it highlighted that the MACD line falling below the signal line has intensified the bearish sentiment.
Given these indicators, FinancialFreedomGoals is forecasting potential declines to key Fibonacci targets at $0.2506 and $0.2197. However, the analyst notes that a break above the $0.3815 resistance level could provide some hope for the bulls.
Notably, with ADA currently trading at $0.33, a decline to $0.2197 would represent a significant loss of approximately 33% for current investors. However, considering ADA’s price was $0.80 earlier this year, such a drop would amount to a more substantial 73% loss from its peak.