Cardano ‘Bull Trap’ Risks Triggering 50% ADA Price Correction

Cardano’s ADA rebounded by more than 40% from its late June lows near $0.139 and was climbing back toward $0.196 as of Monday, Aug. 10. However, this rally may end up trapping bulls due to a convincing bearish continuation setup.

ADA Bear Flag Risks Breakdown Toward $0.10

ADA’s recovery appears to be unfolding inside a bear flag, a bearish continuation structure that typically forms after a sharp decline followed by an upward-sloping consolidation.

The token was trading near $0.196 on Aug. 10, testing the 0.382 Fibonacci retracement level at $0.1963 and its 100-day EMA near the same area. This resistance cluster could limit the ongoing rebound despite the daily RSI rising toward 64.

A rejection from current levels would initially put ADA on course toward the flag’s lower trendline, roughly coinciding with the 0.236 Fib level near $0.1744.

Losing this support would strengthen the bearish setup and expose the 0 Fib level near $0.1391, effectively bringing Cardano back toward its June bottom.

The broader bear flag would confirm after a decisive breakdown below the rising support trendline. Applying the height of the preceding May-to-June decline to the potential breakout point produces a downside target near $0.0979.

That would represent an approximately 50% decline from current prices, while pushing ADA below the psychologically important $0.10 level.

Giant Weekly Bear Flag Points to $0.08

Cardano’s weekly chart is flashing an even larger bearish continuation setup, with ADA already breaking below the lower trendline of a multi-year bear flag that developed after the 2021–2022 collapse.

The breakdown keeps the broader downside target near $0.078, roughly 60% below current prices. ADA is also trading well below its 20-week exponential moving average (20-week EMA, the green wave) near $0.216, showing that the medium-term trend remains under pressure despite the latest rebound.

Unless ADA decisively reclaims the 20-week EMA, the bounce may remain corrective. Continued weakness could first drag the token back toward the recent lows before the larger bear-flag target near $0.08 comes into focus.