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Why Cardano Price is Falling Today

Decreasing user activity and strong resistance to the upside are driving Cardano prices lower today, with bears focusing on the ADA price of $0.80.

Cardano is showing weakness today, trading at $1,022, down 9% in the last 24 hours. A fraud attempt, reduced user engagement with the network, and several on-chain signals suggest that ADA could fall even lower soon.

ADA Price Falls After Cardano Foundation Account Hack on X

Investor sentiment towards Cardano has turned negative for the first time in over a month, amid growing concerns about its ability to sustain its uptrend.

Amidst this waning optimism, the Cardano Foundation account on X was hacked on December 8.

The hacker promoted a fake ADA-linked token on Solana and published false claims about a lawsuit by the Securities and Exchange Commission against ADA and the company behind it, which would lead to a halt in ADA transactions.

Although the message seemed convincing, the Cardano Foundation immediately denied it, deleted the posts, and assured the community that ADA withdrawals would continue as normal. Despite the Cardano Foundation’s swift action to thwart the hacker’s fraudulent intentions, the incident had a direct impact on market sentiment towards ADA, according to data from Santiment.

It also impacted user interaction with the network, as evidenced by the sharp decline in total value locked (TVL) in Cardano since the hacker posts appeared on X, according to data from DefiLlama.

The chart below shows that Cardano’s TVL has fallen by over 21% from its all-time high of $708.92 million on December 3rd to approximately $508 million at the time of publication.

Cryptocurrencies, Dollar, SEC, Markets, Cardano, Tech Analysis, Market Analysis, Altcoin Watch

Cardano’s social sentiment and reduced TVL indicate reduced user activity, reduced demand for ADA tokens, and a negative impact on its price.

ADA Price Meets Strong Resistance

With ADA price trading at $1.0, it appears that bears have created a strong supply zone around the $1.05 price range. Data from IntoTheBlock shows that over 928,460 ADA addresses moved about 102,150 ADA tokens for an average price of $1.05 in the range of $1.03 to $1.06.

The same IOMAP chart shows that ADA is encountering relatively strong resistance on its path to recovery compared to the support it has on the downside. This suggests that the path of least resistance for the token is down.

This view is shared by pseudonymous technical analyst Sssebi, who says that there is not much support for ADA if it breaks below the key level of $1.05.

“If this trend line does not hold, we could see ADA fall to $1 or even $0.91.” Sssebi was referring to the lower trend line of the bullish flag on the four-hour time frame, which was broken during early Asian trading hours on December 10.

In another post, Sssebi shared that “the bottom may have been reached for ADA,” as evidenced by the large volume candle on the daily chart.

“Usually a large candle with volume in a given direction indicates that the move is almost over. If we confirm this with the fact that it has entered a revalidation zone and has recovered the RSI + bounced off key support, this could mean that the decline is over.” A close look at the technical setup shows that ADA is still trading above a multi-year downtrend line that was broken five weeks ago. The weekly chart below shows that $0.80 is a strong support area for the ADA price.

If bullish traders succeed to maintain the uptrend, will likely push ADA higher, with the $2.40 level representing the target for buyers.

On the other hand, failure to hold above $0.80 would signal the inability of buyers to stop the sell-off, with the next logical move being the search zone from $0.60 to $0.49, where all the major simple moving averages are located.

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