Cardano (ADA) Formed a Bearish Flag Pattern on Its Daily Chart Dated May 21, 2025

Cardano formed a bearish flag pattern on its daily chart dated May 21, 2025. A bearish flag is a continuation pattern that appears after a sharp price drop

Cardano (ADA) formed a bearish flag pattern on its daily chart, which could signal a nearly 32% drop from the current price of $0.7521 to about $0.5057.

The flag pattern is usually a continuation pattern that appears after a sharp price move, followed by a short-term consolidation within parallel trendlines, and it typically signals further moves in the same direction.

If this pattern confirms, Cardano (ADA) could drop nearly 32% from the current price of $0.7521 to about $0.5057.

The price recently rejected the upper boundary of the flag and now trades near the lower channel, just above the 50-day Exponential Moving Average (EMA), which provides dynamic support at $0.7247.

A close below the lower trendline of the flag with strong volume would invalidate the flag pattern and support the bearish setup.

Meanwhile, the Relative Strength Index (RSI) stands at 52.75. This level is above the neutral 50 mark, which indicates that the bulls still have a slight edge. However, it shows weakening momentum, especially as the RSI has started turning down from its recent high near 60.

At the same time, volume remains low during the flag formation, which matches classic characteristics of the pattern. A spike in volume during a breakdown would add confirmation to the 32% downside target toward $0.5057.

Cardano Launches Forensic Audit Into Unclaimed ADA Vouchers Amid Redemption Controversy

In other news, a third-party forensic audit of Cardano’s long-running voucher redemption program is now underway.

Input Output Global (IOG) has confirmed that global law firm McDermott Will & Emery (MW&E) and accounting firm BDO have been appointed to audit and publish a public report on ADA redemption. IOG’s chief legal and policy officer, Joel Telpner, said both firms would begin work immediately.

The engagement follows weeks of scrutiny over allegations that hundreds of millions of unclaimed ADA were diverted during a 2021 ledger event. The audit aims to deliver a comprehensive historical record of each presale token, including its redemption status and current location.

The scope of the audit also encompasses all on-chain transactions related to the presale tokens and any off-chain activities relevant to the tokens’ management and administration.

Telpner explained that MW&E, which has 1,400 lawyers across 24 global offices, and BDO, which runs a digital-asset forensics division, have been instructed to deliver results “as soon as humanly possible.” He also confirmed that a blockchain analytics firm will join the audit once conflict checks are complete.

At the same time, Emurgo, one of Cardano’s founding entities, supported the audit and urged the community to await the results. It stated that the network redeemed nearly all presale vouchers and rendered the remaining fraction unspendable after the Shelly hard fork. Emurgo added that the team made an on-chain move to preserve redemption rights and described some recent criticism as “excessive” and lacking full context.

On May 19, the Cardano Foundation released a separate statement. While it noted that it had no direct role in post-2021 voucher management, it acknowledged that IOG has led the effort to reach remaining voucher holders over the past four years.

Pressure for transparency intensified after NFT artist Masato Alexander posted a thread on May 7, accusing IOG founder Charles Hoskinson of using “genesis keys” during the Allegra hard fork to reassign 318 million ADA—then valued at $619 million—from unredeemed presale wallets to treasury accounts through a Move Instantaneous Rewards (MIR) transaction.

Hoskinson called the claim “false and misleading.” He clarified that IOG allocated no ADA to itself and confirmed that the remaining funds—less than 0.2% of the crowdsale—went to Intersect, Cardano’s governance body. He also warned that spreading the accusation could lead to legal consequences.

No publication date has been set for the audit report. Telpner admitted,

“As of today I honestly don’t know,”

but reaffirmed that both firms have been told to make the report public as soon as possible.

Moreover, Cardano will take part in GITEX Europe 2025, which will be held in Berlin from May 21 to 23. The event spotlights digital identity, data transparency, artificial intelligence, and blockchain in education. Cardano confirmed its participation in an official post on X.

Cardano representatives will discuss how blockchain supports secure identity systems, improves data handling, and integrates AI tools in public and educational sectors. The platform recently highlighted its efforts to promote decentralized solutions in real-world use cases.

Cardano is a public blockchain that supports smart contracts. It launched in 2