Peter Brandt, a seasoned commodity trader, and chartist has predicted an incoming crash for Cardano’s native cryptocurrency ADA. In a tweet shared on Friday, Brandt suggested that Cardano price action is forming a classical bearish pattern that could shave off 90% of the currency’s value. He also mentioned a similar plunge predicted in 2018 for Litecoin (LTC) that was originally mocked by crypto watchers but proved to be accurate later on.
The bearish pattern that Brandt is referring to in Cardano’s case is known as the Head and Shoulders. This technical indicator is formed by three continuous price peaks on a baseline, with the middle peak being higher than the other two, which are usually close in level. In this scenario, a commodity’s price usually drops below the baseline -- also known as the neckline -- and eventually settles at a point that represents the height between the top of the middle peak and the support level.
According to the charts shared by Brandt, ADA price action is currently reflecting this pattern.
The analyst believes that the ADA/USD exchange rate could decline up to 90% and trade at $0.12. However, a percentage-based calculation indicates that this loss could put the currency at $0.35, which is a 60% drop from its spot price of $1.26.
Since bottoming out in March, Cardano is up by 7,000%, and technical estimates suggest that this gain could increase further. Pseudonymous crypto analyst Rekt Capital cited an upside wick in currency’s price action beyond $1.30. But he also asserted that ADA’s weekly close must break past this level if it has to continue to its upward momentum.
Although Cardano exited its descending triangle almost a week ago, it is yet to challenge its $1.33 resistance. Some experts have hinted that a break above this point could lead the token towards the $1.90 mark. Again, if Cardano fails to hold above $1.20 then it could slide further and retest its $1 support price.