- Cardano (ADA) dropped over 6% to $0.89 amid a market-wide correction that saw Bitcoin fall to $100K and Ethereum decline 5%.
- ADA is testing critical support within a bullish pennant pattern after surging over 300% between November-December 2024 to reach $1.32.
- The price is hovering near the lower trendline support around $0.89, reinforced by the 100-day Simple Moving Average.
- A successful hold of support could lead to a bounce toward $1.01 resistance, with the next move largely dependent on Bitcoin dominance rejecting its current retest level.
Date: February 2, 2025 | 05:50 AM GMT
The cryptocurrency market has seen a sharp decline in the past 24 hours, with Bitcoin (BTC) dropping to $100K and Ethereum (ETH) sliding by 5%. This downturn appears to be linked to BTC dominance retesting a key breakout level.
Amid this market-wide correction, Cardano (ADA) has also suffered, falling over 6% to trade around $0.89.
However, ADA is now testing a critical support level within a Bullish Pennant pattern, raising the possibility of a rebound.
ADA’s Bullish Pennant Setup
Between November and December 2024, Cardano surged more than 300%, reaching a high of $1.32. Following this impressive rally, ADA entered a consolidation phase, forming a bullish pennant pattern.
Recently on January 16, ADA faced rejection at the upper boundary of the pennant near $1.16, triggering a decline toward the pattern’s lower trendline support. This level has previously acted as a key rebound zone, and ADA is once again testing this crucial support area.
Currently, the price is hovering around $0.89, sitting just above the lower trendline with additional reinforcement from the 100-day Simple Moving Average (SMA).
Is a Bounceback Coming?
If ADA successfully holds its support level, the price may bounce back toward the next resistance at the 25 SMA. Crossing this level could push it toward the pennant’s upper resistance, estimated at $1.01. A breakout above this resistance zone could invalidate the bearish structure, paving the way for a fresh rally.
ADA’s next move largely depends on the BTC dominance chart, which is currently retesting its rising wedge breakout.
If BTC dominance confirms a rejection and resumes its downtrend, it could shift momentum back toward altcoins, allowing ADA and others like XRP, XLM, and HBAR to recover quickly.
Traders should closely monitor BTC dominance and ADA’s price action near this key support zone for confirmation of the next move.
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