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Cardano: Why ADA might be in for further correction as it breaches 2022 lows

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Cardano: Why ADA might be in for further correction as it breaches 2022 lows

Just when you think that ADA can’t possibly go lower, the cryptocurrency market pulls a surprise bearish move, sending it to new 2022 lows. The cryptocurrency has now extended its decline by 45% from its April high.

The latest bearish wave did not spare ADA despite the fact that it was already one of the most bearish cryptocurrencies since September last year. ADA previously showed signs of a potential bounce back from support within the same price level as the 2022 low it achieved on 24 February.

There was notable consolidation near the $0.75 price zone since April 30. It even registered a significant rally on 4 May but it failed to secure enough bullish momentum before a pullback on 5 May.

The lack of buying pressure to support more upside gave way for capitulation and a break below the support level. ADA traded at $0.66 at the time of writing, after tanking by roughly 12% in the last 24 hours.

Source: TradingView

ADA is currently hovering just above the oversold zone but not quite there yet despite the bearish performance. This means we might still see some more downside if it fails to secure enough buying pressure to push up the price. Its Money flow indicator currently suggests that the outflows and inflows are cancelling out, hence the lateral performance.

A look at ADA’s on-chain activity

As far as on-chain metrics are concerned, its 30-day MVRV ratio is currently at -19.16%, which means that most ADA holders are in the red. Its age consumed metric barely registered any activity in the last few days.

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Source: Santiment

However, ADA’s supply distribution shows something interesting. The accounts holding more than 1 million coins registered an increase since 6 May while those holding between 100,000 and 1 million ADA coins have been registering declining balances.

Source: Santiment

The observation can be interpreted as a sign that whales have been accumulating. However, the uptick might just be the inflows in exchange wallets. Nevertheless, ADA is still trading at a heavy discount from its historic top. Meanwhile, Cardano is still making significant strides and achieving major milestones. These factors make ADA an attractive coin for the next major rally.

Michael is a full-time journalist at AMBCrypto. He has 5 years of experience in finance and forex and more than two years as a writer in the crypto and blockchain segments. Michael’s writing at AMBCrypto is primarily focused on cryptocurrency market news and technical analysis. His interests include motorcycles and exotic cars.

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Is Cardano’s [ADA] rally probable yet? The answer might impress you

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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

Source: TradingView, ADA/USDT

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.

Rationale

Source: TradingView, ADA/USDT

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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. 

Conclusion

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.

With a background in financial analysis and reporting, Yash is a full-time journalist at AMBCrypto. He has a keen interest in blockchain technology, with a primary focus on technical analysis of cryptocurrencies.

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ADA holders perplexed as network clings to ‘hard work’ narrative with new…

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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.

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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.

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Cardano (ADA) Could Slide Back To $0.40 – But $0.68 Still Doable

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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.

Suggested Reading | Ripple (XRP) Price Picks Up As SEC Legal Showdown Drags On

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.

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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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