The cryptocurrency market witnessed a sudden downturn mid-week as Bitcoin reverted below the $110,000 mark. The selling pressure further intensified amid the escalating geopolitical tensions in the Middle East. The altcoin market, following this bearish momentum, plunged the Cardano price over 4% today and developed a traditional reversal pattern. The on-chain whale activity also records notable selling, reinforcing the possibility of a prolonged downtrend.
Cardano Whale Dumping and Geopolitical Unrest Fuel Bearish Momentum
Over the past four weeks, the Cardano price has experienced a notable correction, dropping from $0.864 to its current trading value of $0.63, representing a 27% loss. This downtrend gained additional momentum over the weekend as the geopolitical tensions surged in the Middle East after Israel launched an unprecedented attack on Iran’s nuclear sites.
Typically, such events would alert retail traders, prompting them to quickly switch to a panic-selling mode. However, the latest on-chain data highlights that a Cardano whale has been actively selling their holdings, reinforcing the bearish market sentiment.
According to renowned analyst Ali Martinez, the high-profile investors have sold over 270 million ADA coins since last week. Historically, whale selling has coincided with a major market top, followed by a notable price correction.
Head and Shoulders Breakdown Could Trigger ADA to $0.51
By press time, the Cardano price trades at $0.629 with an intraday loss of 4.97%. The downtick currently challenges the monthly support trendline at $0.625, indicating a pivot moment for ADA.
The daily chart analysis indicates that this bottom trendline serves as the neckline support of a well-known reversal pattern known as the “head and shoulders.” This pattern features three peaks—a prominent central peak (the head) flanked by two smaller, shallower peaks (the shoulders) on either side.
A recent crossover between the 50- and 200-day exponential moving averages indicates that the broader market trend for ADA is bearish.
Thus, the coin price is likely to pierce the neckline support and flip this level into a potential resistance. The post-breakdown fall could push the ADA coin 18% down to retest the multi-month support of $0.51.
On the contrary, the $0.51 support has stood firm as a major accumulation zone for buyers, indicating a suitable platform for a bullish turnaround.
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