On Friday, Cardano (ADA) saw its market prices climb over 3%, riding a wave of optimism that swept across the crypto sector. While this is a welcome change, it’s important to remember that it follows a week of mostly downward trends. Crypto analyst Ali Martinez, who is fairly well-known in industry circles, has cautioned that Cardano, which holds the position as the ninth-largest cryptocurrency, may face more significant drops if its critical technical support doesn’t hold up.
In a recent post on X, Martinez delivered an insightful analysis, suggesting that ADA’s current market dynamics could lead to a downturn. Utilizing the Fibonacci retracement levels—a tool that many traders rely on to pinpoint potential support and resistance points—Martinez highlighted that Cardano, despite its recent gains, still trades near a crucial support zone.
These Fibonacci retracement levels are essentially horizontal lines drawn to identify where price movements could slow down or reverse. They are derived from the Fibonacci sequence, and their reliability in predicting price behavior—whether a fall, gain, pause, or reversal—makes them particularly valuable.
According to the accompanying chart, ADA is presently trading at about $0.66, slightly above the 50% Fibonacci retracement level identified at $0.63. This area has provided solid support recently. However, Martinez warns that if ADA closes below $0.63 on a daily basis, it could indicate a bearish shift, opening the doors to further declines.
In such a scenario, Cardano might retest the following important support level found at the 61.8% Fibonacci retracement point, around $0.53. Should the selling momentum continue through this zone, ADA could potentially drop to $0.42, aligning with the 78.6% Fibonacci retracement level.
Cardano has had a tough time sustaining any significant upward momentum after hitting a local high of $1.30 back in early December 2024. Since that peak, ADA has entered a corrective phase, much like the broader cryptocurrency market.
For those bullish on ADA, holding the line at $0.63 is essential to keep any positive market sentiment alive. Yet, a more meaningful signal for a bullish turnaround would be reclaiming the price range of $0.78 to $0.80, indicating a potential upward rally and market recovery.
Currently, ADA’s trading at $0.66, maintaining the levels discussed earlier. Even with recent gains, ADA’s weekly performance is down by 5.00%, and its monthly chart shows a 33.58% decline, underscoring a persistent bearish trend over the past weeks.
In a slightly more positive light, the daily trading volume has seen a 19.56% increase over the past 24 hours. This uptick suggests rising market interest, hinting that the recent rally might have staying power, powered by strong buyer conviction.
