Cardano (ADA) is struggling to break past the $0.74 mark, experiencing over a 7% decline over the past week, indicating weakening buyer dynamics.
Slowing Outflows: A Red Flag
Typically, outflows of tokens from exchanges are considered bullish, but the outflow dynamics for Cardano are slowing down. Recently, the intensity of outflows has decreased, indicating fading buying pressure. As of August 4, the net outflow was $5.24 million, but the number of users removing ADA from exchanges for holding is diminishing. This may lead to increased inflows, suggesting selling plans that could exacerbate price declines.
Momentum Indicators Show Bearish Trend
Indicators such as MACD and OBV are indicating stronger bearish trends. The MACD histogram is deep in the red with no signs of an early reversal. This, combined with the flattening of OBV, suggests significant decreases in ADA purchases even during recovery attempts, which usually signals a bad sign for bulls.
Lower Highs and Support Levels
ADA is trading below $0.7446, which is the crucial Fibonacci level from the July rally. On the daily chart, it is near significant support at $0.68, with each bounce showing lower highs. A break below $0.684 could result in a drop to $0.536, representing a 25% decline from current levels. Conversely, pushing past $0.81 could shift the negative trend.
Amid declining buyer activity and bearish indicators, Cardano's price may experience significant downturns. If buyers do not step in soon, a 25% drop to $0.53 could be a realistic scenario.
