Briefly –
- Cardano price moves beyond an ascending channel’s top trend-line, suggesting a possible retest.
- According to the weekly price chart, the RSI and ADA printed bearish divergence, alarming a near-term correction.
- Transaction stats indicate that any ADA upward move will encounter a critical resistance up to the levels at $2.76.
Cardano has rallied exponentially this year but seems to suffer momentum exhaustion at the moment. The token sustains a massive retracement after recording its second swing peak on 30 August. Though the plummet somewhat started one month ago, the “Ethereum-Killer” appears to wait for more ugly sessions.
ADA Technicals Turn Bearish
Cardano’s price formed two higher lows and higher highs on the weekly chart since 2020 February. Connecting the swing points depicted the creation of an ascending channel.
Though ADA broke from the pattern on 1 2020 February, things shifted within no time, taking Cardano high by 643%, to $2.47 from $0.33. The surge took nearly three months. However, the remarkable upswing encountered exhaustion, resulting in a 60% plummet.
Cardano failed to gather momentum after that, trading in sideways for almost two months. Another upswing followed the coiling up, resulting in an uptick to $3.10. For now, ADA has chances to record a 2nd local top as the RSI formed lower highs. With that, the alt formed a bearish divergence. The development accounted for the 60% correction witnessed by Cardano.
That divergence resulted in ADA’s 32% plummet to its current price. Though the crypto sustains bullishness with higher lows and higher highs, Cardano has to retrace before starting its uptrend. If the plunges continue, the asset can revisit $1.68 and $1.46 with massive bearish scenarios.
Though Cardano’s price might be ugly, fundamentals have surged since the Alonzo update in September. Moreover, the project’s DeFi ecosystem is gaining momentum. Also, Cardano founder Charles Hoskin said that market players could access DeFi’s second off.
He revealed vital features, including liquidity and interoperability. Other noteworthy developments in the ADA blockchain include SpaceBudz, a newly introduced NFT marketplace. The ADA wallet Nami creator Berry Pool launched SpaceBudz.
Though the altcoin market seems dull with the increased BTC dominance, market players believe altcoin’s time is coming. With that, the crypto will overcome the selling pressure due to amplified capital inflows. Buying activities might produce a close past $2.76, then $3. That can attract sidelined investors to take ADA to $5, coinciding with 161.8% FIB retracement.
James Thompson