Cardano (ADA) Technical Analysis: The cup and handle pattern and death cross indicate a fall risk.

Gate news, Cardano (ADA) price has risen for two consecutive days, in line with the performance of most crypto assets. However, as the ADA price forms a cup and handle pattern, experiences a death cross, and the number of active users declines, its price is likely to erase these gains.

The market shows that ADA is currently priced at 0.5566 US dollars, with a 24-hour trading volume of 540 million US dollars, and its market capitalization has reached 2.01 billion US dollars.

Cardano price forms a cup and handle pattern The daily chart shows that the price of Cardano fell back after reaching a peak of $0.863 on May 12. On June 4, the 50-day and 200-day exponential moving averages crossed, forming a death cross pattern. A death cross typically leads to further declines as it signals that bears are gaining the upper hand.

The ADA price is also slowly forming a cup and handle pattern, which is a common continuation signal. This pattern includes a horizontal support level, which in this case is $0.519. It also has a rounded top, with the upper boundary at $0.863.

The characteristic of the cup and handle pattern is a pullback or consolidation, and this situation is currently occurring. After the cup and handle pattern, a bearish breakout will occur.

The profit target for the cup handle pattern is first determined by identifying the height. In this case, the peak is $0.863, and the bottom is $0.519, so its height is $0.344. The breakout point is at the cup's lower limit of $0.519, so the target price is $0.179 ($0.519 minus $0.344).

If the ADA price breaks above the 200-day moving average of $0.703, the bearish ADA price prediction will be invalidated.

(Source: TradingView)

Cardano active users are declining Third-party data shows that Cardano's network activity has been underperforming, especially for a project valued at over $20 billion. According to Artemis data, the daily active users on the Cardano chain have significantly decreased this year. In June, the daily active user count was 20,000, far below last year's peak of over 54,400. The number of users has been declining for several months.

(Source: Artemis)

Further data shows that this month's trading volume has dropped to 619,000 transactions, the lowest level in over a year. In November last year, the trading volume peaked at 2.8 million transactions. In contrast, Solana's trading volume over the past 30 days has exceeded 2 billion transactions.

The on-chain transaction fees of Cardano have plummeted from $978,000 in December last year to $146,000 over the past 30 days. Solana made a profit of over $26 million during the same period. Its stablecoin supply has dropped to $31 million, which is negligible compared to the $327 million supply of Unichain launched by Uniswap in March.

With the crash of futures open interest, the price of Cardano may also be impacted. The data has fallen by more than $678 million from a peak of $1.5 billion year-to-date.

(Source: CoinGlass)

Conclusion The price of ADA may soon experience a significant decline after forming a death cross pattern. In addition, it has also formed a cup and handle pattern, which is a common bearish continuation signal. The fundamentals of Cardano are also relatively weak, such as a decrease in the number of addresses and low stablecoin supply. Traders still need to pay attention to future developments regarding whether ADA can welcome new positive support to break through its current predicament, as both macro factors and the project's own progress may impact price trends.

(Source: CoinGape)