Legendary Trader Warns of Potential Cardano Price Crash

Cardano’s price has experienced a significant drop, falling over 20% from its peak this year, and according to legendary trader Peter Brandt, the coin could face more downside in the near future.

Cardano, a well-known layer-1 cryptocurrency, retreated to $0.90, down from its high of $1.326 in 2024. Brandt, who is known for his expertise in technical analysis, has raised concerns about the potential for further declines in Cardano’s price. He pointed out a head and shoulders (H&S) pattern forming on both the daily and four-hour charts, which could signal a bearish breakdown.

An H&S pattern consists of two shoulders and a head, with the shoulders at $1.153 and the head at $1.327. The neckline of the pattern is drawn at $0.914. Historically, a breakdown from such a pattern often leads to significant price drops, with the target typically being the distance between the head and the neckline. If Brandt’s analysis proves correct, Cardano’s price could fall to around $0.629, which represents a 32% drop from its current level.

In addition to the bearish technical pattern, Cardano’s fundamentals are showing signs of weakness, contributing to its underperformance compared to other layer-1 blockchains like Solana and Ethereum. According to data from DeFi Llama, Cardano’s total value locked (TVL) in decentralized finance (DeFi) has dropped from over $700 million in November to $478 million. This decline is also reflected in ADA terms, with the TVL falling from a peak of 670 million ADA to 494 million ADA.

Furthermore, data from IntoTheBlock indicates a decline in Cardano’s network activity. The number of daily active addresses has dropped significantly, from a peak of nearly 210,000 in November 2023 to just 66,500. This decline in user engagement is a concerning sign for Cardano’s growth.

Another key metric, futures open interest, has also shown a downward trend, signaling weakening demand for Cardano in the futures market. On Thursday, Cardano’s futures open interest fell to $775 million, down from a year-to-date high of over $1.1 billion. Futures open interest is an important indicator of market sentiment, as it reflects the volume of unfilled orders in the futures market. A decline in open interest can suggest that traders are losing interest in the asset, further supporting the notion that Cardano could face additional downside.

With weak technical indicators, falling network activity, and declining demand in the futures market, Cardano’s price may continue to face pressure in the near term. Investors and traders should remain cautious and watch for any potential breakdowns in key support levels, as further declines may be imminent if these trends persist.