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Cardano, the eighth largest cryptocurrency by market capitalization, might see a decline of about 12% if a sell signal presented on its chart validates.
Ali, a crypto analyst, noted that the TD sequential, a technical analysis tool, has presented a sell signal on the ADA daily chart. This anticipates a correction that could see ADA retest the $0.30 support level.
Cardano saw a strong recovery in recent weeks as momentum picked up further after buyers pushed the price above Oct. 19 lows of $0.24. Since that date, Cardano has marked 16 out of 19 days in the green. The bull-driven rally culminated in highs of $0.375 on Nov. 6.
The strong rally pushed the RSI into the overbought zone, implying that a brief consolidation or correction is possible.
In this light, Cardano is seeing mild profit-taking, down 2.11% in the last 24 hours to $0.345.
If the declines continue and the price falls below $0.32, ADA might fall below the $0.30 mark. This is the critical level for the bulls to defend to maintain the uptrend.
However, if the price remains above $0.32, the likelihood of a surge to $0.38 increases.
According to IntoTheBlock, ADA got a strong vote of confidence last month. Big holders accumulated 1.89 billion ADA last month, translating to over $600 million at current prices. The majority of the accumulation took place between $0.249 and $0.271, as stated.
Per the latest CoinShares report, digital asset investment products saw inflows in the past week totaling $261 million, representing the sixth week of consecutive inflows. This run of inflows now matches the July 2023 run of inflows and is the largest since the end of the bull market in December 2021. Cardano recorded modest inflows of $0.5 million.