Cardano's 15% Drop Looms: Traders, Brace for Impact

Is Cardano set for a 15% drop? Traders, watch out for THESE…

Cardano (ADA) has been on a strong uptrend recently, but some analysts believe it could be due for a correction. Here are some factors to watch out for:

• Market sentiment: The overall market sentiment is bearish, with many investors fearing a prolonged trade war and economic downturn. This could lead to a sell-off in risk-on assets like crypto.
• Profit-taking: The recent rally in Cardano has left the market vulnerable to sharp corrections, especially as traders look to lock in profits at psychological resistance levels. AMBCrypto's analysis of the market cap chart showed a strong sell-off after multiple retests of the $3.5 trillion range, suggesting that many traders decided to exit at peak valuations.
• Fear-driven market conditions: The Crypto Fear and Greed Index was at 39 (Fear) at press time, a stark contrast from the Neutral 55 recorded last week. Fear-driven market conditions have historically led to prolonged downturns as traders rush to protect capital, exacerbating the selling pressure.
• Market-wide sell-offs and liquidations: The crypto market experienced an abrupt downturn, with Bitcoin dropping from its recent highs of over $100,000 to an intraday low of $91,995—a staggering drop of over 8%. Ethereum and other altcoins followed suit, with billions wiped out in minutes. According to liquidation data, over $2 billion worth of positions were liquidated in the last 24 hours, with Ethereum alone accounting for $600 million in forced liquidations. The sharp price declines triggered cascading stop-loss orders, intensifying the selling pressure.

What's next for Cardano?

While short-term panic has set in, evaluating whether this crash is a momentary correction or the start of a prolonged bear phase is important. The Fear and Greed Index suggests further downside risk, as investors move into risk-off mode. However, fear levels around 30-40 have historically presented buying opportunities, particularly for long-term investors looking to accumulate at discounted prices. The next few days will be crucial in determining whether Cardano and other assets can find support and stabilize.

Key levels to watch