Cardano at Risk of 32% Decline as Audit Intensifies and GITEX Focus Approaches

Cardano is currently facing a 32% crash risk as it forms a bearish flag pattern on its daily chart as of May 21, 2025. This pattern indicates a potential further downside for the cryptocurrency. If the pattern confirms, Cardano (ADA) could drop to approximately $0.5057 from the current price of $0.7521.

The price of Cardano recently rejected the upper boundary of the flag pattern and is now trading near the lower channel, just above the 50-day Exponential Moving Average (EMA) at $0.7247. The 50-day EMA is currently acting as dynamic support for the price. However, if ADA closes below the lower trendline of the flag with strong volume, it would validate the bearish setup.

The Relative Strength Index (RSI) for Cardano reads 52.75, indicating weakening momentum as it starts to turn down from its recent high around 60. Additionally, the volume during the formation of the flag pattern remains low, which aligns with the classic characteristics of the pattern. A spike in volume during a breakdown would further confirm the 32% downside target towards $0.5057.

In parallel to these technical developments, a third-party forensic audit of Cardano’s voucher redemption program is currently in progress. Input Output Global (IOG) has appointed global law firm McDermott Will & Emery and accounting firm BDO to conduct the audit and publish a public report on ADA redemption. Joel Telpner, IOG’s chief legal and policy officer, confirmed that both firms have started working on the audit.

The forensic audit comes in response to allegations of misappropriation of unclaimed ADA vouchers during a ledger event in 2021. The audit aims to provide a detailed historical record of each presale token, including its redemption status and current whereabouts to address the controversy surrounding the program.

As Cardano navigates these challenges, it is also preparing to participate in GITEX Europe 2025 in Berlin on May 21. This event will provide a platform for Cardano to showcase its utility and governance structure for the ADA token, further highlighting the project’s commitment to transparency and integrity in the face of ongoing scrutiny and potential market risks.