Cardano (ADA), one of the most well-known cryptocurrencies, continues to face challenging market conditions as we approach the end of 2024. Despite its solid fundamentals, the token has been struggling to gain upward momentum, with many other major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) also experiencing declines. This has led to a prevailing bearish sentiment in the broader market, and Cardano is no exception, with its price expected to potentially drop further in the near term.

Market Sentiment and Current Price Action

As of December 31, 2024, ADA is facing significant selling pressure, with traders concerned about ongoing market uncertainty. Currently, ADA is trading at around $0.845, marking a drop of more than 3% in the last 24 hours. The current technical indicators suggest that ADA could continue its downward movement, especially if it fails to hold the critical support levels.

The broader cryptocurrency market remains neutral-to-bearish, with many assets struggling to find solid ground. This is largely due to external factors like regulatory challenges, ongoing geopolitical tensions, and a lack of major catalysts driving bullish action.

Cardano’s Short-Term Price Prediction

The short-term outlook for ADA suggests that the price could continue its descent. The most recent technical analysis reveals the formation of a descending triangle pattern on the daily chart. This bearish pattern typically signals a continuation of downward momentum if the price fails to break above the descending resistance line. ADA has recently broken below the support of a head-and-shoulders formation, which further strengthens the case for additional declines.

If ADA’s price closes a daily candle below the key level of $0.825, there’s a strong possibility it will decline further, potentially reaching as low as $0.75. This would represent a 10% drop from its current price. The breakdown of such important support levels could cause further panic among traders, driving the price lower.

However, there is still a glimmer of hope for ADA in the long term. As it stands, the price is hovering near the important $0.825 mark, and a bounce from here could set the stage for a reversal. If ADA manages to reclaim this level and maintain a positive daily close above it, it could stabilize and eventually mount a recovery.

On-Chain Data and ADA Outflows

Despite the bearish technical outlook, Cardano continues to show strong long-term potential. On-chain data from Coinglass reveals a notable outflow of ADA tokens from exchanges. This suggests that investors are taking a long-term view and removing their assets from exchanges, potentially to hold them for the future. In total, over $38 million worth of ADA has been withdrawn from exchanges recently.

The outflow of ADA indicates that long-term holders are not selling in the face of market pressure, and this can be interpreted as a sign of confidence. Investors who believe in the long-term success of Cardano may view these price declines as buying opportunities, positioning themselves for potential gains once the market turns bullish again.

In contrast, shorter-term traders seem hesitant, with the increased volatility and uncertainty in the market leading to liquidation of long positions. Data also shows a drop in ADA’s open interest by 3.9% in the past 24 hours, reflecting the cautious approach of market participants at present.

Looking Ahead: What’s Next for ADA?

For now, the focus is on whether ADA can maintain its crucial support levels and prevent further losses in the short term. Should the price fail to defend the $0.825 support, the next target could be the $0.75 region. However, long-term holders’ actions suggest a belief that ADA has greater potential once the broader market conditions improve.

For those looking at Cardano for long-term investments, these price drops may present an opportunity to buy at lower levels before a potential recovery. While the immediate future for ADA may appear bearish, the token’s fundamentals remain strong, and its community continues to innovate within the blockchain space. As the year closes, the narrative surrounding Cardano’s potential is one of patience, with many waiting for a market turnaround in 2025.

In conclusion, while the short-term outlook for ADA remains cautious, the long-term potential continues to shine through. If ADA manages to weather the storm of this bearish trend, it could see a solid rebound in the coming months as market conditions improve. As always, investors should remain vigilant and be prepared for volatility in this unpredictable space.