Cardano price risks 30per drop in Q2 despite a ‘major’ hard fork ahead
Categories: Crypto News US
Cardano’s (ADA) price risks undergoing a severe correction in the next few months despite touting its blockchain network’s bolstering growth and a “major” hard fork event in June.
Descending channel hints at ADA sell-off ahead
ADA, which makes up about 1.75% of the total crypto market capitalization, has been trending lower since September 2021 inside a “descending channel” pattern that has successfully capped its multiple upside attempts, as illustrated in the chart below.
ADA’s 200-day exponential moving average (200-day EMA; the blue wave), alongside the 0.236 Fib line (near $1.29) of the Fibonacci retracement graph, drawn from a $2.96 swing high to a $0.78 swing low, further aided the bearish bias.
As of April 15, ADA’s price has been consolidating inside the $0.97–$0.92 range, signaling intentions to continue its pullback from its fakeout top near $1.25.If the descending channel setup continues to pan out, ADA/USD could fall to its previous bottom range near $0.78 while eyeing the channel’s lower trendline around $0.65 as its primary downside target.
Cardano network’s growth fails to impress traders
Meanwhile, Input Output Hong Kong (IOHK), the research and development firm behind the Cardano project, has announced incredible network growth entering April 2022.Cardano founder Charles Hoskinson stressed the word “major” five times when describing the fork’s importance to the overall network growth in a video released on April 12, a day after ADA crashed more than 10%.
Notably, like Bitcoin (BTC), ADA’s correlation with the Nasdaq 100 (NDX) rose to a record level, hitting 0.97 on April 15 versus 0.79 at the beginning of the year.In other words, ADA’s price is currently in lockstep with the tech-heavy index, which has erased more than $1 trillion from its market capitalization in April.