Cardano price hits key support as rare pattern points to a 50% dive
Cardano (ADA) price increased by 4% on November 4 as investors capitalized on a dip after reaching key support at $0.5035. It rose to $0.5450 and is still 50% below its August high. The recovery aligns with a crypto market rally, including Bitcoin (BTC), and was supported by optimism over Donald Trump's tariff case at the Supreme Court. Cardano's rise also benefited from the Glacier airdrop's second phase, along with modest growth in futures open interest. However, its total value locked in DeFi dropped 32% in the past 30 days. ADA is forming an inverse cup-and-handle pattern on the daily chart, signaling potential downside with a price target of $0.2428, approximately 50% below the current level.
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Cardano's Price Rebound and Market Overview
Cardano price increased by 4% on Wednesday, Nov. 4, as investors bought the dip after it reached a crucial support level. Over the day, ADA rose to $0.5450, recovering from this month's low of $0.5035, but it remains about 50% below its August peak. This uptick occurred during a cautious crypto market rally, with Bitcoin (BTC) and most altcoins in the green, contributing to an overall market capitalization of $3.46 trillion.
Impact of Supreme Court Decision and Airdrop Activity
The rebound in ADA price coincided with news from Polymarket traders speculating that Donald Trump would lose on tariffs at the Supreme Court, which influenced market sentiment. Additionally, Cardano is benefiting from the progress of the Glacier airdrop's second phase, which involves the scavenger mine. The team announced an increase in the NIGHT token allocation to 1 billion NIGHT, enabling more users to claim these tokens. The scavenger mine phase will continue through Nov. 29, followed by the redemption phase prior to the Midnight mainnet launch.
Challenges in Cardano's Ecosystem Development
Despite the rebound, Cardano faces significant challenges. Its total value locked (TVL) in the decentralized finance (DeFi) sector dropped by 32% in the last 30 days, reaching $247 million. Furthermore, its stablecoin supply remains limited. Charles Hoskinson, in a recent statement, mentioned that Midnight will be a Cardano asset, which integrates all assets in its ecosystem. This announcement comes amid concerns regarding stalled ecosystem growth.
ADA's Technical Indicators and Risks
On the technical side, ADA recorded a modest increase in futures open interest, rising to $657 million from $604 million a day earlier. The daily price chart shows that ADA hit a bottom at $0.5030, a critical support level it has tested multiple times this year. However, risks persist as a death cross pattern recently formed on the chart, with the 50-day moving average dropping below the 200-day moving average on Oct. 22.
Inverse Cup-and-Handle Pattern Formation
Cardano's price is now forming an inverse cup-and-handle (C&H) pattern, seen within the daily timeframe. The lower side of the pattern is at $0.5034, while the upper side sits at $1.00, representing a 50% depth. By measuring this depth from the lower point of the cup, the pattern suggests a potential target of $0.2428, which is approximately 50% below the current level. This poses a downside risk for the coin despite the recent recovery.