Cardano (ADA), has not been able to maintain its bullish weekend momentum. The cryptocurrency lost last week’s gains and seems poised for further losses as the crypto market trends sideways.
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Cardano (ADA), trades at $0.44, with a 5% loss over the past 24 hours.
The cryptocurrency is at critical levels as $0.40 was operated as support during these past months’ bearish downside price action. Losing these levels could push ADA’s price back to its 2020 levels.
The cryptocurrency witnessed a major rally in that period, after having experienced sideways movement and consolidation for a while. Cardano’s trading volume dropped to below $0.5 and $0.15 between 2019-2020, which could be devastating for those who invested in ADA over the last two years.
Peter Brandt, a legendary trader suggestsADA’s 2020 level could be the beginning of a decline. As seen below, Brandt claims that ADA’s price is following a head and shoulders pattern which spells future depreciation for this cryptocurrency.
The legendary trader called ADA’s price chart “the very definition of ugly” and set $0.40 as a potential price target to the downside.
This head and shoulders pattern could be invalidated if Cardano’s bulls managed to push the price above $0.70 in the short term. Cardano is not supported below $0.40.
Material Indicators’ (MI) data indicates that the majority of the liquidity in the ADAUSDT trade pair sits above $0.44. There are around $1.5 million in bid orders below ADA’s price current levels and around $1 million in asks orders in the opposite direction.
Brandt proposed that the head and shoulder pattern would be $0.40. If it continues downtrending, there will not be any bid orders to support the price. Therefore, ADA’s price could experience downside volatility.
Can Cardano Avoid A Doom Scenario?
At the same time, ADA’s price records a thin order book to the upside. If the price can sustain its current levels and make a run towards $0.50, there could be a change at invalidating Brandt’s head and shoulders pattern.
Retail investors are putting more pressure on Material Indicators to sell their products. Investors with bid orders of around $1,000 (green in the chart below) have begun buying into Cardano’s price action.
Material Indicators analysts believe that investors who place bid orders in green (in the bottom) may be whales disguised as small investors. The relevance of Cardano’s current levels and the sudden increase in these orders suggests this possibility is likely for short timeframes.
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Perhaps these ADA-whale aggregators could have started to build up and are able protect these levels. In higher timeframes, all investors class have begun selling including investors with asks orders of around $100,000 which supports Brandt’s scenario.
