Saad Ullah
Cardano (ADA) recent surge to $0.90 has caught traders' attention, but warning signs are flashing red. Despite riding the broader crypto comeback wave, ADA could be setting up for a brutal correction.
ADA Price Shows Dangerous Technical Pattern
Cardano hit $0.90 on Friday, September 12 - its best level in two weeks and 80% higher than June's bottom. But the charts tell a different story.
ADA is forming a rising wedge pattern, with trend lines from March highs and June lows getting closer. This usually ends badly for bulls. The Average Directional Index dropped to just 16 - the lowest since May 8 and way down from July's peak of 47. When momentum dies while prices rise, that's a red flag.
Both the Percentage Price Oscillator and RSI are heading south too. If this plays out, ADA could drop to $0.51 - a 45% fall from here. Only breaking above $1.20 would kill this bearish setup.
Cardano (ADA) DeFi Numbers Collapse
The real problem is underneath. Total value locked in Cardano's DeFi protocols tanked 45% - from $720 million in December to just $383 million now. That's massive capital flight while the rest of crypto is doing well.
Worse still, Cardano only has $40 million in stablecoins on its network. Compare that to the $287 billion stablecoin market, and you see how far behind Cardano really is.
Why ADA Price Could Get Hammered
The Fed rate cuts everyone expects might turn into "sell the news." Traders positioned for good news might just take profits when it happens.
Cardano is also getting left behind by other blockchains. While Ethereum and Solana keep attracting users, Cardano feels stuck. The low stablecoin adoption shows it's failing to compete.
Saad Ullah
