The price of Cardano has increased by 8.6% in the last 24 hours, likely because emotions are building around the Midnight premiere. This is a new privacy-focused subchain. In the lunar cycle, the midnight phase usually signifies a reset – a moment before a new beginning. However, in the case of ADA, this reset may instead signal the beginning of a new decline.
The price continues to trade in a bearish formation, and additionally, the momentum remains weak. Several on-chain signals indicate a possible continuation of the same downward trend that has been dominant for months. Could this be the beginning of a 39% price drop for ADA?
The structure of the bearish flag is still valid. Is Cardano awaiting a judgment?
On the daily chart, the price of Cardano remains inside a bearish flag. This pattern forms when a smaller rise follows a sharp decline, i.e., a correction of a large move, which in this case has formed a channel. This channel often acts as a pause before continuing the same downward trend.
Between November 10 and December 9, the price of ADA reached a lower peak, while the RSI reached a higher peak. RSI, or Relative Strength Index, is a momentum indicator that shows whether buying or selling pressure is stronger. When the RSI rises but the price does not follow, it often signals that the bounce is weak and sellers continue to control the trend.
Since ADA has already dropped by about 54% over the last year, this hidden bearish divergence supports the view that the downward trend is not over yet.
The bearish flag pole predicts a possible drop of 39% if the lower trend line is broken. This move would place ADA near $0.25, which is a deeper correction calculated based on the length of the pole.
Therefore, the next price moves of Cardano may set the stage for the rest of the story. The Midnight premiere may signify a new phase for the network, but the chart still treats this bounce as part of a larger downtrend.
Whales are exiting – are traders selling into the bounce?
On-chain signals align with the bearish chart. The largest Cardano whales, wallets holding more than 1 billion ADA, have significantly reduced their exposure since December 8. Their total balance dropped from about 1.86 billion ADA to almost zero in just a few days. Whales do not empty positions this way unless they expect better entry points lower or want to use strength to exit.
The second on-chain indicator also confirms this behavior. Spent Coins Age Band tracks how many ADA tokens move each day, both in young and old wallets. On December 6, about 95.26 million ADA moved to the blockchain. By December 10, this number had increased to 130.46 million ADA, representing an increase of about 37% over four days.
This jump shows that more holders, including older ones, are likely sending coins to the market. When whale balances drop and the number of coins issued rises at the same time, it usually means that traders are using the bounce to sell rather than to accumulate.
Thus, the technical section has shown that the price structure of Cardano is bearish. This section shows that the behavior is also bearish. Now, price levels simply translate this combined pressure into specific zones that investors must watch.
Cardano price levels show a broader downward path.
Since both the chart and on-chain signals are negative, the next moves depend on several clear levels.
If the price of Cardano falls below $0.42, the lower trend line of the bearish flag will be broken. From there, the price could slide towards $0.37. If the level of $0.37 does not hold, the full flag projection towards $0.25 becomes more likely, which could lead to a 39% drop suggested by the pattern.
For the bulls, the path is narrower but still possible. The price of Cardano must first recover the $0.55 level. A daily close above this level would break the upper boundary of the bearish flag and weaken the bearish setup. Staying above the $0.60 level would then show that the Midnight premiere is shifting from a reset to a more constructive recovery.
At this moment, only a small drop of 7-8% is needed to trigger a bearish breakdown, while a rise of almost 20% is needed to invalidate it. With the exit of whales and an increase in the number of spent coins, the weight of the evidence continues to lean towards declines.
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