Cardano (ADA): The risk of breaking an important support level before the wave of take profit from investors.

Cardano (ADA) is currently fluctuating around the 0.85 USD level on Tuesday, after losing more than 7% in the last two sessions. This correction is mainly due to profit-taking pressure from investors, leading to increasing selling force. Traders are advised to be cautious, as if the closing price falls below the important support level of 0.82 USD, the downtrend could extend into a deeper correction.

Take profit exerts short-term adjustment pressure

The Network Realized Profit/Loss index (NPL) recorded by Santiment indicates that Cardano holders are aggressively taking profit.

Chart data shows that NPL surged strongly on Monday, reaching its highest level since the end of July. This means that, on average, investors sold with significant profits, thereby increasing selling pressure in the market.

NPL chart of Cardano | Source: SantimentNotably, the long-to-short ratio on Coinglass has dropped to just 0.87 on Tuesday - the lowest level in over a month. The fall of the ratio below 1 reflects the pessimistic sentiment among traders, as the majority bet on the scenario that ADA prices will continue to decline.

The long-to-short ratio chart of Cardano | Source: Coinglass## Cardano Price Forecast: ADA Faces the Risk of a Deep Correction if It Breaks Key Support

On September 8, the price of Cardano (ADA) surged strongly, surpassing the daily support level at 0.84 USD and recording a 9% increase in just the following five days. However, the rapid recovery quickly stalled as ADA reversed and fell by 7.66% during Monday's trading session. As of Tuesday noon, this coin is fluctuating around the 0.85 USD mark.

The short-term outlook remains quite fragile. If the corrective trend continues and ADA closes below the Fibonacci retracement level of 61.8% at 0.82 USD, the price is likely to retreat deeper towards the next support area at 0.76 USD.

ADA/USDT Daily Chart | Source: TradingViewTechnical indicators are also supporting the negative scenario. The Relative Strength Index (RSI) is at 49, below the neutral level of 50, reflecting an early signal of a downtrend. Meanwhile, the MACD indicator is preparing to form a bearish crossover; if this signal is confirmed on the daily timeframe, selling pressure may increase, reinforcing the bearish outlook for ADA.

However, the bullish scenario has not been completely ruled out. If ADA holds above the support zone of 0.84 USD, this coin still has a chance to recover, aiming for the peak on August 14 at 1.02 USD.

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