Cardano is up 12% in September. As the market cools, ADA could see a correction, potentially leading to a short-term drop.

This analysis investigates how a gradual resurgence in ADA selling activity could cause its price to drop by 29% in the coming weeks.

Holders begin to realize profits

Cardano’s Chaikin Money Flow (CMF) has been trending downwards over the past few days. The CMF tracks the movement of capital into and out of the market, and while it remains positive, its gradual decline could serve as a warning sign.

A positive but declining CMF suggests that while buying pressure is still present, the intensity of that buying is weakening. This indicates that demand for the asset may be waning, with buyers showing less aggression.

If the current trend continues, it could signal a shift to reduced market interest or increasing selling pressure.

CMF da Cardano (ADA). Fonte: SantimentCMF from Cardano (ADA). Source: Santiment

Additionally, negative readings from ADA’s daily active addresses (DAA) divergence confirm reduced demand for the altcoin. This metric, which measures an asset’s price movements with changes in its number of daily active addresses, is at -43.3% at press time.

For context, it has been negative since September 7. This suggests that much of the altcoin’s September rally was driven by the overall market rally rather than specific trader demand for the asset.

DAA da Cardano (ADA). Fonte: SantimentDAA from Cardano (ADA). Source: Santiment

Read more: How to Buy Cardano (ADA) and Everything You Need to Know

Cardano Prediction

Currently trading at $0.39, Cardano appears to be on the verge of falling below its Ichimoku Cloud, which has recently become a support level. The Ichimoku Cloud indicator identifies trends, support and resistance levels, and potential market reversal points.

When an asset's price approaches the cloud, it signals a weakening of bullish momentum, suggesting that recent upward price movements are losing steam.

Therefore, if the bulls fail to defend the cloud as a support level, the price could drop by 29% in the short term. This way, it could trade below $0.27.

Gráfico da Cardano (ADA) no TradingViewCardano (ADA) Chart on TradingView

However, if the market trend changes and ADA starts witnessing an increase in demand, its price could rise towards the resistance of $0.47.

The article What to expect from Cardano (ADA) in October? – Analysis appeared first on BeInCrypto Brasil.