Cardano Price Faces Reversal After Reaching 2024 High of $0.657

Cardano’s price experienced a sharp pullback after hitting a high of $0.657, its highest level since March 30, marking a 138% increase from its lowest point earlier in the year.

After briefly touching this peak, Cardano (ADA) entered a correction phase, falling by 14% from its weekly high and trading at $0.562 at press time. This decline mirrors the broader pullback across the cryptocurrency market, as Bitcoin (BTC) and other major coins also retreated after their recent rallies. Bitcoin, for instance, touched $90,000 before dropping back to $86,000, with similar movements observed in other digital assets due to profit-taking by investors after a strong bull run. This type of consolidation is common during prolonged bullish periods, as traders lock in profits.

Key Drivers Behind Cardano’s Surge

Several factors contributed to the recent rally in Cardano’s price. One key driver was the political developments in the U.S., with Charles Hoskinson, Cardano’s founder, hinting at a more active role in U.S. policy now that Donald Trump has secured a second-term election victory.

In addition to this, Cardano’s decentralized finance (DeFi) sector saw significant growth, with its total value locked (TVL) reaching $350 million, the highest level in over seven months. The ongoing BitcoinOS integration, which is set to unlock $1.3 trillion in liquidity, is expected to further boost this figure.

Moreover, Cardano’s recent surge also coincided with a rise in futures open interest, which hit its highest level in months. The futures market for Cardano has remained above $500 million for three consecutive days, the first time this has occurred since March.

Bearish Indicators Could Lead to Further Decline

Despite the bullish momentum, technical indicators suggest that the price rally may be losing steam. On the daily chart, Cardano had previously formed an inverse head and shoulders pattern before its recent rally, which is often seen as a bullish signal. However, signs of a bearish engulfing pattern are emerging, with a red candle engulfing the preceding small bullish candle. This could indicate that the rally is losing momentum.

Looking ahead, Cardano’s price may face a potential drop toward the psychological $0.45 level, which represents a 21% decline from its current price. This bearish outlook could be invalidated if Cardano manages to break above its recent high of $0.657, turning that level into support.

In conclusion, while Cardano’s price is facing a short-term correction, its longer-term outlook depends on whether the broader market remains bullish and if key technical levels hold.