The prolonged bear market has been brutal for countless altcoins, with Cardano’s ADA being particularly affected. Several hours ago, it dropped below $0.14 for the first time since late 2020, and it currently trades at around $0.147. Meanwhile, ADA’s market capitalization fell to approximately $5.5 billion, meaning the token is no longer among the 20 largest cryptocurrencies.
According to certain indicators, a rebound could be on the horizon, but a popular analyst thinks the asset is not completely out of the woods yet.
‘Bull Trap?’
In addition to ADA’s price decline, the community had to endure the major exploit of the Cardano ecosystem project SecondFi, in which attackers drained over $20 million.
Despite the breach, renowned analyst Ali Martinez revealed that the TD Sequential indicator has flashed a buy signal. He claimed this development could result in an immediate relief rally to as high as $0.176, which can stop there and instead be followed by another correction.
“While this indicator signals a near-term bounce, the broader market structure suggests caution. This localized push may act as a trap to lure in buyers before hitting immediate resistance and continuing lower,” Martinez warned.
Earlier this month, he opined that ADA has been forming a bearish flag since the beginning of June and has started breaking from the structure. In his view, this has increased the likelihood of a slump towards $0.13.
Another analyst who touched upon the matter was BillifyX. They noted that ADA has lost its major support zone at around $0.148-$0.15, adding that if bulls can’t reclaim that area, the asset could continue bleeding. “But if they do, this breakdown could turn into a trap,” they added.
For their part, X user Sssebi (who is usually quite bullish on ADA) suggested that the asset’s cycle bottom could be around $0.12.
The Optimistic Scenario
Despite ADA’s poor performance and the carnage in the broader crypto market, some technical indicators, including the asset’s Relative Strength Index (RSI), hint at an impending resurgence. Its ratio has slipped under 30, meaning the coin has entered oversold territory and could be due for a recovery. The index ranges from 0 to 100, with values above 70 interpreted as a warning of an incoming price decline.
ADA’s exchange netflow points in the same direction. Over the past weeks, investors have shifted from centralized platforms toward self-custody methods, thereby reducing immediate selling pressure.
Source: CryptoPotato
