Vasil

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.

Related: Charles Hoskinson and ETH dev get into a war of words post-Vasil upgrade

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.

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 Vasil upgrade ready with all ‘critical mass indicators’ achieved

With the countdown now under 24 hours for Cardano’s most ambitious upgrade, all three metrics necessary to launch the awaited Vasil upgrade have been met.

The Cardano Vasil upgrade is set to take place in less than 24 hours on Thursday, with the Cardano team noting all three “critical mass indicators” needed to trigger the upgrade are now met.

A Wednesday update on Twitter by the company behind Cardano, Input Output Hong Kong (IOHK), states that within the last 48 hours, 13 cryptocurrency exchanges had confirmed their readiness for the hard fork, representing over 87% of Cardano’s (ADA) liquidity.

Of the top exchanges for ADA liquidity, Coinbase is the only exchange listed as “in progress” regarding its integration status, according to an ecosystem readiness page by IOHK.

However, a recent tweet by Coinbase has already hinted that it will support the fork, saying ADA transactions will be halted for maintenance “for the Cardano Vasil hard fork.”

Originally intended for a June launch, the Vasil upgrade has seen its launch day twice rescheduled, most recently due to a bug discovered in Cardano’s prior node version, which created incompatibility issues.

With an updated Vasil node in place, over 98% of mainnet blocks are now being created by the updated nodes, while the blockchain’s top decentralized applications (DApps) have also confirmed their readiness, marking all three metrics needed for the upgrade go-ahead. 

News of the upgrade has seen social media chatter about ADA increase by 35.16% over the past seven days from Monday, according to market intelligence platform Santiment, third behind Ripple and Ethereum.

Once live, the upgrade will be the blockchain’s most significant since its Alonzo hard fork in September last year, which brought functionality for smart contracts for the first time. This upgrade aims to bring smart contract enhancements, reduced costs and increased throughput on the network.

IOHK said one of the most significant upgrades brought by the fork is faster block creation as they can be transmitted without full validation.

Related: Cardano outranks Bitcoin in global top intimate brands in new report

The Vasil upgrade is named after the late artist Vasil Stoyanov Dabov, a Cardano community member and ambassador who passed away in December 2021 due to a pulmonary embolism.

Currently, ADA’s price sits at $0.44, according to CoinGecko, down 3.4% over 24 hours and down over 85% from its $3.09 all-time high on Sept. 2, 2021.

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.

Fed’s dot plot. Source: Bloomberg

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.

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

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.

Related: Cardano outranks Bitcoin in global top intimate brands in new report

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/USD three-day price chart. Source: TradingView

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.

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 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.

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%.

Related: Cardano outranks Bitcoin in global top intimate brands in new report

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

ADA/USD daily price chart. Source: TradingView

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. 

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

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

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.

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 hard fork ‘ever closer’ as upgraded SPOs account for 42% of blocks

IOHK wants to see at least 75% of new blocks coming from upgraded nodes, along with two other “critical indicators” before implementing the Vasil hard fork.

Input Output Hong Kong (IOHK), the blockchain company behind the Cardano network, says the much anticipated Vasil hard fork is “ever closer” after revealing the state of three critical indicators that will trigger the mainnet update. 

In a Twitter thread posted on Thursday, IOHK shared its latest “rollout status” of the Vasil upgrade to its 265,800 followers, with updates on “three critical mass indicators,” which will determine when the mainnet update will go ahead.

This includes having 75% of mainnet blocks produced by nodes running 1.35.3, around 25 exchanges upgraded (representing 80% of liquidity) as well as the top ten key mainnet decentralized applications (DApps) also having upgraded.

On Thursday, the blockchain company noted that Stake Pool Operators (SPOs) running the latest node 1.35.3 now account for 42% of mainnet block production in the current epoch, which is now more than halfway to the 75% required.

IOHK also noted that one of the world’s largest exchanges, Binance, has reportedly upgraded its Cardano nodes to the latest version. The firm has been targeting roughly 25 exchanges to upgrade their nodes, as it would account for approximately 80% of its native token’s total liquidity.

Regarding its mainnet DApps, IOHK confirmed that it would continue to stay close to many of the DApp teams on Cardano, with four out of 10 already confirming they are actively testing against node 1.35.3 on the pre-production testnet.

IOHK also shared that no new bugs have been identified, leaving nine minor bugs still to be dealt with, none of which will cause an unintended hard fork.

Related: What’s going on with Cardano’s testnet and Vasil hard fork?

The long-awaited Vasil upgrade is aimed at reducing transaction size and allowing for more network activity while lowering costs.

After a roadmap was released by IOHK on May 19, which planned for a hard fork on June 29, the Vasil upgrade has been plagued by delays while developers ensure the network transition proceeds smoothly.

Charles Hoskinson, co-founder of Cardano, recently responded to criticism about the upgrade being rushed. He suggested that they could delay the launch for months to retest the code which has already been tested and running, but the DApp developers would not see this as worthwhile given they have waited so long already.

Fork of July: Cardano Vasil upgrade successfully launches on testnet

With the Cardano testnet hard fork complete, all that remains is to fork the mainnet, which will come in about four weeks or when developers have had enough time to prepare their tools for the upgrade.

The much-anticipated Vasil hard fork has been completed on the Cardano testnet, bringing it one major step closer to becoming a reality on the mainnet and promising broad performance upgrades.

Project developers, stake pool operators (SPO) and exchanges are now encouraged to deploy their work on the testnet to ensure integrations run smoothly when the mainnet gets the Vasil treatment in about four weeks.

Once completed on the mainnet, the Vasil hard fork will allow faster block creation and greater scalability for decentralized apps (DApps) running on Cardano. Input Output HK (IOHK), the organization that produced Cardano, said in a Sunday tweet that in addition to the performance upgrades, developers would benefit from “much-improved script performance and efficiency” and lower costs.

Vasil will also enable interoperability between Cardano sidechains, one of the main features developers intend to launch in the current Basho phase of the blockchain’s development. Basho is the fourth development phase for Cardano that focuses on scaling and will be followed up with the Voltaire phase, in which governance will be the main focus.

IOHK also noted that there would not be a proposal to hard fork the mainnet until “ecosystem partners are comfortable and ready,” but it is expected to come in about four weeks.

The previous phase, Goguen, saw the launch of smart contract capabilities on Cardano, which decentralized finance (DeFi) developers took advantage of by launching dozens of decentralized exchanges (DEX) and DeFi protocols, according to ecosystem tracker Cardano Cube.

Related: Ethereum fork a success as Sepolia testnet gears up to trial the Merge

Cardano’s top DApp with $49.7 million in total value locked (TVL) is currently the DEX WingRiders, according to the DeFi data compiler DefiLlama.

The testnet hard fork has done little to move Cardano (ADA) as it is only up 0.1% over the last 24 hours to $0.45, according to CoinGecko.