Cardano (ADA) price has surged 140% so far in November, largely due to Donald Trump’s re-election as US President.
However, some indicators suggest that much of the Trump-inspired ADA gains could decline in the coming days.
ADA signals a 35% adjustment for weak skills.
Cardano’s ADA price is showing signs of potential downside risk with a bearish “rising wedge” pattern forming on the 4-hour chart.
A technical structure, defined by the convergence of upward sloping trend lines, often indicates a potential downward trend reversal.
If ADA breaks below the lower trend line of the wedge, the collapse could be as deep as the height of the widest part of the wedge.
This suggests a potential price target close to $0.598 in the near term and $0.513 in a more extreme bearish scenario over the November-December period.
ADA/USD 4-hour price chart. Source: TradingView
Interestingly, the $0.513 level, about 35% down from the current price level, is in line with the 200-4H exponential moving average (200-4H EMA, blue wave).
Volume has been declining during ADA’s recent rally, which is another warning sign of a weakening rally. Bearish patterns, such as rising wedges, are more stable when volume is decreasing.
Moreover, Cardano’s chart shows a growing deviation between the rising price and the falling Relative Strength Index (RSI), which indicates a bearish divergence and further signals that the upward momentum is weakening.
RSI is at 68, close to 70, which is overbought territory, suggesting that ADA is approaching an overextended phase, which could lead to a price correction.
Cardano’s weekly chart supports a sell scenario.
Especially with higher volume, a clear break above the upper trend line of the wedge could invalidate the bearish outlook.
This move could open the door to a test of the $0.90 resistance level, which coincides with the 0.236 Fibonacci retracement trendline on the ADA weekly chart.
ADA/USD weekly price chart. Source: TradingView
From a fractal analysis perspective, $0.90 has maintained a strong circulation level since April 2022.
For example, ADA fell 65-75% after testing as resistance in March 2024 and April 2022, with similar corrections occurring in November-December.
If this happens, the next downside target for Cardano on the weekly chart appears to be a descending trend line transitioning from resistance to support, which is consistent with the 200-week EMA (blue wave) at around $0.476. This is about a 40% drop from the current price level.
ADA’s weekly RSI, currently 7 points above the overbought threshold of 70, supports a long-term correction scenario.
relevant: Charles Hoskinson shares a new plan to help foster U.S. cryptocurrency policy.
On the positive side, Cardano’s fundamentals have improved due to Trump’s re-election.
His administration has pledged to avoid strong cryptocurrency regulation in 2025, which could increase demand for cryptocurrencies like ADA.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.