ADA Price

Why is Cardano (ADA) price up this week?

ADA price had gained nearly 80% in a month and data suggests the rally could continue.

Cardano (ADA) recorded an impressive 43% gain in the seven days leading up to Dec. 14, reaching its highest level since May 2022. The rapid increase to $0.64 has pushed Cardano’s market capitalization to $22.7 billion, an interesting point to note, as it matches the valuation of Danske Bank (DANSKE.CO), Denmark’s largest bank, which serves over 5 million retail customers.

While ADA’s market cap is quite impressive, it’s essential to recognize that decentralized protocol valuations differ significantly from traditional financial assets. Traditional assets rely on generating revenue to cover expenses, including financing costs and operational overhead. On the other hand, Cardano is a decentralized protocol, so its market capitalization does not depend on sales and earnings. Nevertheless, it’s important to analyze the potential reasons behind ADA’s price increase to determine if further gains are possible.

Constructing a narrative for Cardano’s recent success is relatively straightforward, but pinpointing the specific events responsible for the 70% gain in December is more challenging. For instance, a post on the social network X by user @matiwinnetou brilliantly highlights the driving factors behind this bullish momentum.

Why is Cardano price down today?

Cardano’s price is down today as traders secure profits at ADA’s overbought levels ahead of a key Federal Reserve rate decision.

Cardano’s (ADA) price is down today, falling 7.75% in the last 24 hours to hit $0.55 on Dec. 13.

Let’s discuss factors that have been driving the Cardano prices lower recently.

From the technical perspective, ADA’s price drop today is part of a correction cycle that started on Oct. 9, when ADA’s price reached its 18-month high of $0.64.

Why is Cardano price up today?

Cardano price continues its rebound move in December, with ADA price up 75% already as altcoins catch up to Bitcoin’s rally.

The price of Cardano (ADA) jumped over 19% to $0.64 on Dec. 9, its highest level in 18 months. It’s up 75% in December alone.

Cardano’s recent gains did not accompany any groundbreaking fundamentals. Instead, they appeared on the cryptocurrency market catching up to Bitcoin (BTC) this month.

Notably, Bitcoin’s crypto market dominance has declined 3.5% from its Dec. 6 local peak, indicating that many traders have been rotating capital out of the Bitcoin market to seek profit opportunities in altcoins. That has benefited Cardano, whose market share has jumped over 46% since Dec. 6.

Cardano price chart paints ‘Burj Khalifa’ with 7-month losing streak — More losses ahead?

On-chain Cardano metrics show a decline in transactional activities on the network.

Cardano (ADA) price is in the process of painting its seventh red monthly candle in a row as the token fell to its lowest level since February 2021.

The trend saw ADA’s price rising nearly 800% to $3.16 between February 2021 and September 2021, followed by a complete wipeout of those gains entering October 2022. Amusingly, the entire price action took the shape of the “Burj Khalifa,” the world’s tallest skyscraper in Dubai.

Ada Khalifa pic.twitter.com/KE2SxTO3bN

— Trader_J (@Trader_Jibon) October 19, 2022

ADA price eyes 35% price crash

The ADA price correction began primarily in the wake of a similar downtrend across the cryptocurrency market, led by the Federal Reserve’s aggressive interest rate hikes to tame rising inflation.

Even an optimistic Cardano network upgrade dubbed Vasil was not enough to bring its buyers back to the market.

Notably, ADA’s price has dropped by nearly 20% since the Vasil hard fork nearly a month ago — an update aimed at improving its network’s scalability and smart contract capabilities.

Moreover, the ADA/USD pair also broke below a key support level that may lead to another major crash ahead in Q4.

The said support level at around $0.42 constitutes a descending triangle, a continuation pattern. In other words, ADA’s potential to continue its prevailing downtrend becomes higher if it forms and breaks out of a descending triangle to the downside.

*ADA/USD three-day price chart featuring descending triangle breakdown. Source: TradingView*

Meanwhile, as a rule of technical analysis, a descending triangle breakdown during a downtrend typically pushes the price lower to a level at length equal to the pattern’s maximum height. Therefore, ADA risks dropping toward $0.248, or by 35%, if the descending triangle breakdown plays out.

$ADA now losing the lights out level and going to the place where coins go when they die. Prob got a -50% in it from that breakdown level imo

And I’m by no means picking on it. I posted charts for almost several alts like this including $SOL and $ETH in Dec-Jan pic.twitter.com/Of0TNZfXKK

— Pentoshi (@Pentosh1) October 19, 2022

Conversely, a retest followed by a close above the triangle’s lower trendline as resistance raises ADA’s possibility to invalidate the bearish outlook. In doing so, it could trigger a descending channel setup forming simultaneously with the ascending triangle, as shown below.

*ADA/USD three-day price chart featuring descending channel pattern. Source: TradingView*

The descending channel setup sees ADA bouncing from its lower trendline to test the upper trendline near $0.45 as its immediate upside target. In other words, a 30% interim price rebound.

Macro risks remain

Overall, Cardano continues to tread ahead under macro risks, primarily after September’s 8.2% inflation reading, which raised the possibility of the Fed continuing its rate hike spree for the remainder of 2022.

Risk assets across the board have witnessed a decline in individual investors’ enthusiasm, which was instrumental in pushing thcryptocurrency prices higher in 2020 and 2021. For instance, Robinhood CEO Vlad Tenev noted:

“2020 and 2021, people were really interested in investing in stocks. There was widespread participation in the stock market. Now people are talking about gas prices and inflation.”

ADA, whose positive correlation coefficient with the U.S. benchmark S&P 500 has remained above $0.80 for most of 2022, also witnessed a sharp decline in its daily active addresses (DAA) since November 2021’s market top.

Notably, its 30-day DAA average dropped to 165,000 on Oct. 19, its lowest level in two years, data from Santiment shows.

*Cardano 30-day DAA average. Source: Santiment*

On a brighter note, the number of Cardano addresses holding 100–1,000 ADA and 1,000–10,000 ADA tokens has increased during the bear cycle, hinting at potential accumulation by large investors, or so-called whales.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Cardano bulls run out of steam after Vasil hard fork — 40% ADA price crash in play

Most Cardano hard forks have preceded ADA price crashes, and Vasil looks no different.

Cardano’s (ADA) long-awaited Vasil update went live on Sept. 22, which promises to make its blockchain more scalable and cheaper than before. However, this has failed to bring bullish momentum to the ADA market.

Sell-the-news hampers Cardano

ADA’s price has dropped by approximately 9.5% since the update and was changing hands for $0.43 on Sept. 26. The ADA/USD pair’s drop was accompanied by a rejection candlestick on its daily price chart, confirmed by a brief rally to $0.48 on the day of the fork and a sharp correction thereafter.

*ADA/USD daily price chart. Source: TradingView*

ADA bulls’ muted reaction to the successful Vasil update is similar to what transpired across the Ether (ETH) market after Ethereum’s Merge .

In other words, a buy the rumor, sell the news event, resembling most of Cardano’s previous hard forks, which have a history of preceding ADA price crashes, as shown below.

*ADA/USD three-day price chart. Source: TradingView*

In addition, macro risks led by a very hawkish Federal Reserve also weighed down ADA’s bullish expectations post-Vasil.

The U.S. central bank’s decision to raise its benchmark rates by another 0.75% came within 48 hours before the Cardano update. ADA fell alongside risk-on assets in response, given its consistent positive correlation with stocks throughout 2022.

As of Sept. 26, the correlation coefficient between the Cardano token and the Nasdaq Composite was 0.83.

*ADA/USD and Nasdaq daily correlation coefficient. Source: TradingView*

ADA price eyes 40% crash

Meanwhile, ADA’s technicals are painting a descending triangle pattern for a bearish outlook in the near term.

Theoretically, a descending triangle in a downtrend acts as a bearish continuation signal, meaning it resolves after the price breaks below its support trendline decisively. In doing so, the price falls by as much as the maximum triangle height.

*ADA/USD three-day price chart featuring descending triangle breakdown setup. Source: TradingView*

Therefore, a breakdown below ADA’s triangle support of $0.41 could have its price crash toward $0.25. In other words, a 40% price decline by the end of 2022.

Cardano (ADA) eyes 15% rally despite Charles Hoskinson’s fear over ‘macro factors’

Cardano’s Vasil update is expected to be a bullish event, but macro fears are strongly countering the upside bias.

Cardano (ADA) will undergo a major network update called “Vasil ” on Sept. 22, potentially making its blockchain more scalable and cheaper. Nonetheless, the news has failed to spark any decisive upside momentum in ADA’s market.

Macro factors weigh on ADA’s best upside scenario

In detail, ADA’s price has risen approximately 3.5% to $0.51 since the Vasil launch announcement, including a circa 14% rally followed by its near-perfect wipeout. In other words, traders initially bought the Vasil hype but were quick to exit markets, as illustrated by the price action below.

*ADA/USD four-hour price chart. Source: TradingView*

Cardano founder Charles Hoskinson blamed “macro factors” for ADA’s underperformance despite the Vasil euphoria, noting that the crypto markets, on the whole, are “disconnected from reality.” He added:

“Cardano has never been stronger and frankly many other projects are also solid across the industry, yet you don’t see that reflected — just a sea of red.”

The statements appeared as riskier assets prepared for another deep plunge in the days leading up to the Federal Open Market Committee‘s (FOMC) meeting on Sept. 20 through 21.

Markets believe that the Federal Reserve officials will vote to increase benchmark interest rates by another 0.75% on Sept. 21. Overall, the U.S. central bank is looking to raise the rate to 3.75% to 4% by the end of 2022.

A high-rate environment could hurt Cardano and other top-cap crypto assets, given it will likely increase the appeal of cash-based instruments among investors.

Is a “mini” Cardano rally ahead?

From a technical perspective, Cardano looks ready to undergo a mini rally in the days leading up to the Vasil hard fork.

On the four-hour chart, ADA’s price tests a support confluence for a potential rebound move. This confluence is made up of a multi-week ascending trendline and a support bar highlighted in the chart below.

Suppose ADA rebounds from the confluence. Then, the ADA’s immediate upside target is around $0.50. This level is a meeting point of two resistance levels: a “multi-week descending trendline” and a “mid-level target” that has served as a price ceiling since mid-August.

Meanwhile, a break above $0.50 could have ADA bulls test $0.53 as their primary upside target, a level with a significant history as resistance. In other words, ADA could print a 15% gain ahead of the Vasil hard fork when compared to its Sept. 7’s price.

However, ADA looks weaker on its longer-timeframe charts, with its three-day performance revealing the presence of a bearish continuation pattern dubbed a “descending triangle.”

ADA risks dropping to $0.26 if it decisively breaks below its descending triangle’s lower trendline, as per rules of technical analysis. In other words, a nearly 40% price decline from current prices.

Cardano gets listed on Robinhood but ADA bulls are running out of steam, risking 40% drop

ADA prints modest upside moves that may run out of steam due to weak technicals and macro factors.

ThCardano (ADA) market has witnessed back-to-back pieces of good news since Aug. 31, from its listing on Robinhood, a U.S.-based retail investment platform, to the release of its first lending and borrowing protocol, Aada Finance.

Additionally, Cardano developer IOHK stated that they are close to clinching “three critical mass indicators” that would lead to the launch of their long-awaited Vasil hard fork in September. Vasil aims to improve Cardano’s scalability and transaction throughput through pipelining.

The upgrade could also improve the decentralized application (DApp) and smart contract capabilities by changing the Plutus script, a programming language used for smart contracts on the Cardano blockchain.

This week, we’re well on our way to hitting our indicators. Over 80% of SPOs have upgraded and more than 70% of the top DApps we’re tracking have confirmed successful pre-production testing.✅4/8

— Input Output (@InputOutputHK) August 31, 2022

But the uplifting updates have failed to attract adequate buyers as ADA’s price trend in the last 24 hours reveals.

Bear market rally

On the daily chart, ADA’s price rose to an intraday high of $0.462 on Sep. 1, a day after bouncing from its sessional low of $0.424, up nearly 9%.

Nonetheless, the move accompanied lower trading volumes, suggesting weaker conviction among traders about an extended rally.

ADA’s modest price rise also came after a sharp 28.5% decline, typically due to short covering, i.e., when traders buy back borrowed tokens to close their open bearish position, thus lifting the spot price briefly.

As a result, Cardano’s rebound may be a bear market rally. This expectation emerges from ADA’s exposure to macroeconomic risks that have kept the ADA/USD pair nearly in lockstep with U.S. stocks.

For instance, the correlation coefficient between ADA and Nasdaq was 0.80 on Sept. 1.

Descending triangle breakdown ahead?

From a technical perspective, ADA has been painting a descending triangle pattern on its daily chart since May 7.

In detail, descending triangles appear as the price consolidates inside a range defined by a falling upper trendline and a horizontal lower trendline. They typically resolve after the price breaks below the lower trendline and, as a rule, can fall by as much as the maximum triangle height.

ADA now tests the lower trendline of its descending triangle setup for a potential breakdown, as shown below. The token will fall to $0.268 by September if the pattern plays out as mentioned above, or a 40% drop from current prices.

Sell the news? Cardano price risks 20% drop despite Vasil hard fork euphoria

ADA runs out of buyers despite the long-awaited Cardano hard fork going live potentially at the end of July.

Cardano (ADA) has dipped this July 21 as the market favors mounting selling pressure around its most reliable resistance levels in 2022 over a major upcoming hard fork.

ADA price could plunge 20% by early August

ADA’s price fell 5% intraday to $0.476. The downside move came as a part of a broader retreat that started a day after it briefly climbed above its 50-day exponential moving average (50-day EMA; the red wave in the chart below) near $0.50.

The 50-day EMA has been serving as ADA’s curvy resistance level since October 2021.

Additionally, the upper trendline resistance of a broader descending channel pattern strengthened the selling sentiment around the ADA’s 50-day EMA wave. Earlier in June, the same resistance confluence had triggered a 35% price drop toward the channel’s lower trendline.

Therefore, ADA’s renewed correction move risks leading the price toward $0.384 by July or early August, down about 20% from July 21’s price.

2018 fractal suggests $0.20 per ADA

However, a separate analysis sees ADA falling to deeper levels than $0.384.

Penned by TradingShot, the bearish ADA forecast draws comparisons between the ongoing correction and the one witnessed during the 2018 market crash, as shown below.

*ADA/USD daily price chart 2022 versus 2018. Source: TradingView*

In detail, the 2018 chart above shows ADA undergoing multiple bearish rejections near its 50-day EMA (the orange wave) while trending downward in a descending channel pattern. The token’s downtrend became exhausted after correcting by nearly 93% from its local high.

“Based on 1D RSI terms, we also seem to be on the third (3) and final leg below the collapse,” TradingShot wrote, adding:

“So if ADA holders want to avoid this, they need to see the price break above the 1D MA50 and sustain trading above it for a week at least. Otherwise, completing a -93% drop from the top is possible at around 0.200.”

When hard fork?

The latest ADA price correction appears in the days leading up to Cardano’s hard fork.

Dubbed “Vasil,” the hard fork was supposed to go live in June but was delayed until the last week of July over several outstanding bugs. Nonetheless, as of July 21, Input Output Hong Kong (IOHK), the firm behind the Cardano blockchain development, has not announced the exact launch date.

Vasil is expected to bring significant performance and capability upgrades to the Cardano blockchain, including faster block creation and higher transaction speeds. From a fundamental perspective, the upgrade could boost ADA adoption due to improved network efficiency.

But Cardano has a history of logging sharp price corrections after most network upgrades, suggesting a prevailing “sell the news” sentiment in the market.

For instance, the blockchain’s Alonzo upgrade in September 2021 partly prompted ADA to rise by over 200% to its record high of $3.16 before launch. But after the upgrade, the Cardano token fell by more than 85%.

ADA has risen by only 25% after bottoming out locally at $0.384 on May 10, suggesting that Vasil’s impact on the market has been limited.

But not everyone is convinced. For example, analyst Lark Davis believes the token will “rip” after the hard fork, given it manages to hold 50-day EMA as support.

#cardano $ada has broken past its 50 day EMA, now we just need Charles to announce the date of the Vasil hard fork and this puppy will rip! pic.twitter.com/yQTiCiCE6H

— Lark Davis (@TheCryptoLark) July 20, 2022

Until then, ADA will likely stay under the “sell the news” pressure, pressured further by ongoing macro risks and their negative impact on crypto markets.

Cardano ‘sharks’ scoop up 79.1 million ADA ahead of Vasil hard fork

ADA accumulation occurs despite a technical outlook threatening a 35% price crash by September 2022.

The decline in Cardano (ADA) price this year has prompted some of its richest investors to accumulate the token.

Cardano sharks in buying spree

Notably, addresses holding between 10,000 and 100,000 ADA, also called “sharks,” have added 79.1 million tokens (~ $37.7 million as of July 9) to their reserves since June 9, according to data from Santiment.

*Cardano shark addresses. Source: Santiment*

Meanwhile, Cardano “whales” that hold between 100,000 and 1 million ADA have stopped selling.

Holding a larger amount of ADA makes sharks and whales powerful enough to determine the token’s upcoming trends via increased volatility or decreased liquidity. Additionally, they can force “fishes,” or investors holding fewer ADA tokens, to copy their trades.

The recent buying spree among the Cardano sharks hints that they have been positioning themselves for a sharp price rebound, especially as ADA trades nearly 85% below its September 2021 record high of $3.16.

Another potentially bullish catalyst is a major technical upgrade slated for the end of this month, following a successful testnet implementation on July 4.

Dubbed “Vasil,” the hard fork could allow faster block creation and improve scalability for Cardano’s decentralized application ecosystem. It will also introduce interoperability between Cardano’s sidechains.

ADA price “descending triangle” could spoil the party

Cardano’s supportive whales and sharks sentiment contrasts with technical indicators suggesting more pain ahead.

Notably, ADA’s price has been painting a “descending triangle” pattern since May 8. Descending triangles typically resolve after the price breaks out in the direction of their previous trend.

*ADA/USD daily price chart featuring ‘descending triangle’ setup. Source: TradingView*

Thus, the Cardano token could risk falling to as low as $0.31, as illustrated in the chart above.

Cardano ‘sharks’ scoop up 79.1 million ADA ahead of Vasil hard fork

ADA accumulation occurs despite a technical outlook threatening a 35% price crash by September 2022.

The decline in Cardano (ADA) price this year has prompted some of its richest investors to accumulate the token.

Cardano sharks in buying spree

Notably, addresses holding between 10,000 and 100,000 ADA, also called sharks, have added 79.1 million tokens, $37.7 million as of July 9, to their reserves since June 9, according to data from Santiment.

Meanwhile, Cardano whales that hold between 100,000 and 1 million ADA have stopped selling.

Holding a larger amount of ADA makes sharks and whales powerful enough to determine the token’s upcoming trends via increased volatility or decreased liquidity. Additionally, they can force fishes, or investors holding fewer ADA tokens, to copy their trades.

Another potentially bullish catalyst is a major technical upgrade slated for the end of this month, following a successful testnet implementation on July 4.

Dubbed Vasil, the hard fork could allow faster block creation and improve scalability for Cardano’s decentralized application (DApp) ecosystem. It will also introduce interoperability between Cardano’s sidechains.

ADA price “descending triangle” could spoil the party

Cardano’s supportive whales and sharks sentiment contrasts with technical indicators suggesting more pain ahead.

Notably, ADA’s price has been painting a descending triangle pattern since May 8. Descending triangles typically resolve after the price breaks out in the direction of their previous trend.

Thus, the Cardano token could risk falling to as low as $0.31, as illustrated in the chart above.