Cardano network expansion has had little effect on the ADA price, which has been in a multi-month slump.
Cardano’s (ADA) price is at risk of a severe correction in the coming months, despite the fact that the blockchain network’s growth is accelerating and a “major” hard fork event is scheduled for June.
The descending channel suggests that an ADA selloff is imminent.
ADA, which accounts for approximately 1.75 percent of the total cryptocurrency market capitalization, has been trending lower since September 2021, contained within a “descending channel” pattern that has successfully capped its numerous upside attempts, as illustrated in the chart below.
The channel gained additional strength on March 27, when ADA broke above its upper trendline, only to reverse completely in subsequent sessions, indicating a lack of conviction among Cardano bulls.
The 200-day exponential moving average (EMA; blue wave) of ADA, combined with the 0.236 Fibonacci retracement level (near $1.29) of the Fibonacci retracement graph drawn from the $2.96 swing high to the $0.78 swing low, bolstered the bearish bias.
As of April 15, ADA’s price is consolidating within the $0.97-$0.92 range, indicating that the bull run from the fakeout top near $1.25 will continue.
If the descending channel setup holds, ADA/USD could fall to its previous bottom range near $0.78, with a primary downside target of the channel’s lower trendline at $0.65.
This represents a nearly 30% discount from the current price.
The growth of the Cardano network has failed to impress traders.
Meanwhile, Input Output Hong Kong (IOHK), the research and development firm behind the Cardano project, has forecast phenomenal network growth beginning in April 2022.
Stablecoins, sidechains, NFTs & partnerships, launchpads & project launches, converter bridges…getting overwhelmed with all the news from the #Cardano universe?
We've gathered a structured recap of the key updates over the last 10 days.
Here's what's happening👇
— Input Output (@InputOutputHK) April 12, 2022
Additionally, IOHK appears to be preparing for the “Vasil” hard fork, a network upgrade that will increase the scalability of Cardano’s blockchain, sometime in June.
Cardano founder Charles Hoskinson used the word “major” five times in a video released April 12, a day after ADA fell more than 10%.
Yes, following Hoskinson’s address and IOHK’s tweets, ADA’s price recovered. However, the rebound has stalled and is now trending sideways, continuing to be influenced by macroeconomic factors.
Notably, like Bitcoin, the correlation between ADA and the Nasdaq-100 (NDX) increased to a record high of 0.97 on April 15, up from 0.79 at the start of the year.
In other words, the ADA price is currently tracking the tech-heavy index, which lost more than $1 trillion in market capitalization in April.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.