The price of Cardano (ADA) is likely to experience a severe correction over the next few months, despite the continued growth of its blockchain network and a “major” hard fork event in June.
Downward chain hints at upcoming ADA sell-off
ADA, which represents around 1.75% of the total cryptocurrency market capitalization, has been trending lower since September 2021, inside a “descending channel” pattern that has successfully capped its multiple upside attempts, as shown in the graph below.
Daily ADA/USD price chart with descending channel setup. Source: Trading View
The chain showed greater strength as ADA broke above its upper trendline on March 27, only to reverse completely in later sessions, showing a lack of conviction among Cardano traders.
ADA’s 200-day exponential moving average (200-day EMA; the blue wave), alongside the 0.236 Fib line (near $1.29) of the Fibonacci retracement chart, taken from a high from $2.96 to a low of $0.78, further contributed to the bearish bias.
As of April 15, the price of ADA is consolidating in the $0.97-$0.92 range, signaling an intention to continue its pullback from its false high of around $1.25.
If the descending channel setup continues to unfold, ADA/USD could fall to its previous lower level near $0.78 while looking at the channel’s lower trendline around $0.65 as the primary downside target. .
Daily ADA/USD price chart. Source: Trading View
This equates to almost a 30% drop from today’s price.
Cardano network growth fails to impress traders
Meanwhile, Input Output Hong Kong (IOHK), the research and development company behind the Cardano project, announced incredible network growth from April 2022.
IOHK also appears to be preparing the “Vasil” hard fork, a network upgrade to make the Cardano blockchain more scalable, in June.
Cardano founder Charles Hoskinson underlined the word “major” five times when describing the fork’s importance to the network’s overall growth in a video posted on April 12, a day after the ADA broke. is crushed by more than 10%.
Yes, ADA price rallied after Hoskinson’s address and IOHK’s tweets. But the rebound has run out of steam and is moving sideways, remaining under the influence of macroeconomic factors.
The daily correlation coefficient between ADA/USD and NDX. Source: Trading View
Notably, like Bitcoin, ADA’s correlation with the Nasdaq-100 (NDX) hit an all-time high, reaching 0.97 on April 15 from 0.79 at the start of the year.
In other words, ADA’s price is currently in line with the tech index, which wiped out over $1 trillion of its market capitalization in April.
We wish to say thanks to the author of this short article for this incredible content
Cardano Price Risks 30% Drop in Q2 Despite “Major” Hard Fork Ahead | Cryptocurrency
You can find our social media profiles and the other related pageshttps://metfabtech.com/related-pages/