Market prices of Cardano (ADA) increased by over 3% on Friday amid a general bullish wave in the crypto market. However, this minor uptick only follows the largely negative performance earlier seen in the week. Notably, popular crypto analyst Ali Martinez postulates the ninth-largest cryptocurrency could still experience steeper market losses if certain technical support fails to hold.
Cardano Critical Support Break Could Lead To 36% Decline
In a recent post on X, Martinez shares a cautionary insight on the current ADA market structure hinting at a potential price fall. Based on the Fibonacci retracement levels, Martinez’s analysis indicates that Cardano still trades near a vital support zone despite recent gains.
The Fibonacci retracement levels are horizontal lines commonly used to identify potential support and resistance zones. They are based on the Fibonacci sequence and are widely used in anticipating a price fall, gain, consolidation, or reversal.
Looking at the chart below, ADA currently trades at $0.66 which is just above the 50% Fibonacci retracement level at $0.63 – a price zone that has acted as a resilient support level in recent weeks. Ali Martinez warns a daily close below $0.63 would signal a bearish shift in market control at this level paving the way for a further decline.
In this case, Cardano could fall to test the next significant support at the 61.8% Fibonacci retracement level around $0.53. If the selling pressure prevails at this zone, ADA prices could potentially slide to $0.42 representing the 78.6% Fibonacci retracement level.
What Next For ADA?
Cardano has struggled to maintain a prolonged bullish form after reaching a local peak of $1.30 in early December 2024. Since then, ADA prices have been in a corrective phase alongside the broader crypto market.
For ADA bulls, defending the $0.63 price level is crucial to sustaining any valid bullish outlook. However, a successful price reclaim of the $0.78-$0.80 price zone would signal an impending price rally and market rebound for the altcoin.
At the time of writing, Cardano trades at $0.66 as earlier stated. Amid recent gains, ADA is down by 5.00% on its weekly chart and 33.58% on its monthly chart reflecting a domineering bearish influence in recent weeks.
Meanwhile, daily trading volume has gained by 19.56% in the past 24 hours indicating a rise in market interest. This development suggests the recent price rally might be sustainable due to a strong conviction among buyers.
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