Cardano’s SuperTrend Signals Bearish Trend—Previous Signal Led to 80% ADA Decline

A cryptocurrency analyst has noted a significant technical analysis (TA) signal on Cardano's weekly chart, indicating a potential price downturn.

Key Takeaways

Cardano's SuperTrend indicator has flipped to a bearish signal, suggesting a potential price decline.
In 2022, a similar signal led to an over 80% drop in ADA's price.
Bitcoin has also experienced a bearish SuperTrend signal, reminiscent of its previous 60% drop during the last bear market.
Cardano's current price stands at approximately $0.40 after a minor recovery above $0.48 last week.

Cardano

Understanding the Bearish Signal in Cardano’s SuperTrend

In a recent update on X, analyst Ali Martinez discussed a concerning signal that has emerged in Cardano’s SuperTrend. The "SuperTrend" is a technical analysis tool used to identify whether an asset is experiencing a bullish or bearish trend. This indicator incorporates the Average True Range (ATR), which measures price volatility.

The SuperTrend is depicted by a singular trendline that functions as both support and resistance. When the price is above this line, it signifies a bullish trend, while trading below it indicates a bearish trend.

The chart shared by Martinez illustrates Cardano's SuperTrend over the past few years:

Cardano SuperTrend
Current price is below the indicator's line | Source: @alicharts on X

The graph indicates that Cardano's price rose above the SuperTrend line in 2023 and remained there until recently. A reversal has occurred, and the indicator is now showing a bearish signal.

Martinez pointed out that the last time this trend occurred in Cardano’s weekly price was in 2022, leading to a decline of over 80%. It remains uncertain whether this recent bearish signal will lead to a similar outcome, or if Cardano will regain bullish momentum despite this trend.

Cardano isn’t the only cryptocurrency facing a SuperTrend flip. In another post, Martinez noted that Bitcoin, the leading cryptocurrency, has also recently experienced a SuperTrend change.

Bitcoin SuperTrend
Bitcoin's SuperTrend movement over recent cycles | Source: @alicharts on X

The chart indicates that Bitcoin’s weekly price is currently below the SuperTrend line, signaling a bearish trend. This pattern also mirrors Bitcoin's previous performance during the last bear market, which saw a drop of over 60%.

Current ADA Price Status

Last week, Cardano experienced a brief recovery, reaching just above $0.48. However, the cryptocurrency has since retraced and is now trading at approximately $0.40.

Cardano Price Chart
Price trend of Cardano over the last five days | Source: ADAUSDT on TradingView