It might be Friday the 13th, but the real scare for many bulls probably came a day earlier, when Bitcoin dropped below $27,000. However, as Bitcoin hit $30k again and the top ten cryptos by market cap fell into formation, here’s how the seventh biggest asset was doing.
You should see me in a crown
At press time, Cardano [ADA] was changing hands at $0.5809 after bouncing up by 42.80% in a day. That brings the coin up to a loss of value of 26.65% in the past week.
So prices are recovering, but how is the community doing after all the whiplash? Unfortunately, it looks like development activity is still down, as has been the case since an earlier price drop last week.
In fact, it seems as if Cardano’s development activity is still strongly linked to ADA’s price performance. This means that ADA’s comparably slow rally rates could chase off developers who want to see profits.
Yet, it seems that Cardano founder Charles Hoskinson isn’t too worried about market bottoms. Rather, a tweet of his on 12 May – with a Game of Thrones soundtrack – suggested the exec might even be ready to face a “cryptowinter.”
If this is your first cryptowinter, then welcome. Been through many since 2011 and they always hit like a cold ice bath. We are in the panicked blood in the street phase. It clears in weeks to months as a bottom is found. Then a long climb up the ladder https://t.co/R1QMF0NgRI
— Charles Hoskinson (@IOHK_Charles) May 12, 2022
What’s the meaning of this? Well, it’s not news that Hoskinson is sick and tired of investors bugging him about when ADA will see its next bull run. One interpretation is that a “cryptowinter,” so to speak, could throw off less dedicated investors so only hardcore Cardano supporters, investors, and builders stay in the community – or on the “ladder.”
As if to prove the point, Cardano saw a spike in whale transactions worth above $100,000. 12 May alone saw 2,397 such transactions while ADA was trading at around $0.4. These levels were last recorded on 24 March 2022. It seems that in spite of “panicked blood” gushing down the streets, some whales decided it was a good time to fill their shopping bags.
Up or down the ladder?
So where could ADA go next? In favor of the bulls or the bears? Two price indicators had a clear answer: bears. The Relative Volatility Index [RVI] was below 50 at press time, which suggested that further volatility could take ADA downwards.
Furthermore, the Awesome Oscillator [AO] was flashing growing red bars below the zero line. This means that in spite of ADA’s green candle, selling pressure is high indeed.
Is Cardano’s [ADA] rally probable yet? The answer might impress you
Cardano’s [ADA] price has been under a strong bearish influence, especially since dropping from the vital $1.2-resistance. After falling below the 20 EMA (red) and 50 EMA (cyan), the altcoin was on a streak of liquidations while correlating with the broader sell-offs.
Altering the overall outlook was still a long shot for the bulls while they had to find renewed buying pressure to snap the constraints of the 23.6% Fibonacci resistance. At press time, ADA traded at $0.5307, down by 3.12% in the last 24-hours.
ADA Daily Chart
Aggressive sell-offs from the $1.2-ceiling resulted in a 67.35% drop from ADA’s April highs. As a result, after falling below its Point of Control (POC, red), ADA poked its 15-month low on 12 May. On its way south, the 61.8% Fibonacci level held up well after restricting the falling wedge breakout. While hampering the bear run, buyers finally induced a few green candles but failed to support it on elevated volumes.
Over the last six days, the altcoin saw an expected bearish pennant breakout as the price action approached the 23.6% level barrier. With an overextended gap between the 20 EMA and 50 EMA, the sellers exhibited their superior edge in the current scenario.
A continued revival from its immediate support could see an anticipated hurdle in the $0.59-zone near the 23.6% level. However, without sufficient volumes, the buyers would find it difficult to challenge the resistance offered by the alt’s near-term EMAs. The buyers would now aim to lower the gap between the 20/50 EMA in the coming days.
The Relative Strength Index suggested that sellers have a clear advantage in the current market structure. The buyers needed to push the RSI above the 38-level to propel a short-term rally beyond the 23.6% level on the charts.
An inability to pick Aroon up (yellow) from the zero-mark could lead to further undesired losses. AN eventual recovery from this level would open doorways for a smoother recovery.
Looking at the current bounce-back from the $0.5-level, ADA could slam into the 23.6% level for testing its resistance. An eventual break above this level could pave a path to challenge the constraints of its near-term EMAs. But the threats along the Aroon up indicator could delay the potential of a bull run.
At last, ADA shares a high correlation with the king coin. Thus, traders/investors should keep a close watch on Bitcoin’s movement to make a profitable move.
ADA holders perplexed as network clings to ‘hard work’ narrative with new…
Cardano’s promise of being ‘The DeFi Chain’ is nothing new under the sun, however, this promise may not be fulfilled anytime soon. Now, while the Cardano community is busy trying luck in the DeFi game, Cardano seems to be losing its faithful long-term investors.
Cardano and long-term holders
Cardano’s investors have been very loyal to their token, much more than that of SHIB’s and DOGE’s investors. These investors have not, for one moment, left the market despite the consistent price falls and crashes.
This is because their faith in Cardano as a blockchain is much stronger than the prevailing market conditions.
These people stood the test of the time when ADA crashed by over 47% on the charts adding to the ongoing downtrend since September 2021. The all-time high it marked then of $3.160 has since declined by more than 84.3%.
This has caused the investors to move around their assets in losses since the beginning of January 2022, affecting billions of ADA on the chain.
Consequently, the MVRV of Cardano plunged to a level of -4.6, the lowest it has been in 24 months (since April 2020). This clearly states that the token at the moment is undervalued.
Upset with the crypto market, some ADA holders even chose to sell. Long-term holders, who are usually considered the best friend of any cryptocurrency, panicked and sold a part of their ADA tokens and ended up destroying $1.27 trillion days in a single day on 3 May.
However, Cardano as a blockchain paid no heed to the same and remained unbothered by the panic selling since its focus is on just expanding the space.
For the same reason, the recently approved Fund 8 was voted upon to fund 367 proposals bringing the total number of projects funded by Project Catalyst to over 1,000.
The network already has over 20 DEXes and Liquidity protocols as well hundreds of other apps stemming from different branches of the crypto space.
This would serve as a massive boost for Cardano since, currently, the network only has $141.5 million locked on the chain. Now, when that changes for the better, the ongoing situation is also expected to improve as a result.
Cardano (ADA) Could Slide Back To $0.40 – But $0.68 Still Doable
Cardano (ADA) price looks bullish as it does a U-turn on Monday following negative economic spikes from China getting crypto traders all worried.
In addition, many major corporations are exiting Russia, including McDonald’s. All of these factors contribute to heightened risk sentiment making it entirely difficult for major cryptocurrencies to elevate in price than usual.
This could also mean bad news for ADA; risking a 32% correction. The negative sentiment has been growing enormously which also signal a downward trend in the next quarters.
As of this writing, the crypto is trading at $0.560514 on Coingecko, Wednesday, down 10% in the last seven days.
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ADA Heading For A Nosedive Below $0.40
Tail risks pad up incessantly and it doesn’t seem to end which could mean ADA investors might head for the exit anytime soon.
ADA price is heading for a nosedive right below the $0.47 price point or at the low end of the distribution zone which could even reach $0.38.
On the brighter side, with the developments happening in the global economics and to the Cardano community, the first trading day of the week has shown promise of recovery. In fact, ADA price could possibly go towards $0.687 and move up to $0.915.
ADA total market cap at $18.09 billion on the daily chart | Source: TradingView.com
Even though Cardano suffered a massive drop during the past week, it managed to recover and reach $0.613 on May 16. Meanwhile, Cardano is currently shaking it off after its gains of 4%.
Suggested Reading | Crypto Analyst Predicts 1 Altcoin Will Fall Down Hard – Is It Cardano?
It went through a three-day bounce right there as shown over the weekend. The whale activity was seen for Cardano which signaled a deviation in price direction.
Cardano TVL is at around $174.74 million. Now, it may seem like the increase is totally insignificant but it’s a winning jump since it has been steadily declining from its peak TVL of $434.74 million in the first quarter or March 28.
The difference between cardano and the other alts. They pay to do stuff like this. The Cardano Community just does it themselves out of love for the ecosystem and philosophy. We got marketing. It’s three million strong and growing. https://t.co/cRdnmGZPZz
— Charles Hoskinson (@IOHK_Charles) May 16, 2022
Cardano Flag On Mount Everest Summit
Charles Hoskinson, Cardano Founder, is loud and proud to have reached the Mount Everest summit. He was ecstatic about the raving support of the community. His remark saying “we got marketing,” definitely speaks volumes of his optimism despite the downward trend that ADA has displayed the previous days.
The Cardano CEO is proud to have a strong and dedicated community comprised of 3 million members and still growing. The native tokens of Cardano also went up to 4.7 million.
Moreover, Cardano has also managed to get $20 million more in funding since Mary 13. Its TVL has jumped from 18 million a few days ago to $137 million on May 16 – that is a 6% change of TVL in a matter of 24 hours.
Featured image from Coinbase, chart from TradingView.com
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