Cardano (ADA) has fallen on July 21 as the market pushes for increased selling pressure around the most reliable resistance level in 2022 over a large oncoming hard fork.
ADA prices could fall by 20% in early August
The price of ADA decreased by 5% per day to 0.476 dollars. The upturn came as part of a broader retreat that began the day after it briefly climbed above the 50-day exponential moving average (50-day EMA; red wave pictured below) near $ 0.50.
The 50-day EMA has served as the flexible resistance level of the ADA since October 2021.
In addition, the upper trend line resistance strengthened the broader declining channel pattern of the sales outlook around the 50-day EMA wave of the ADA. Earlier in June, the same resistance merger had triggered a 35% drop in prices towards the channel’s lower direction line.
As a result, there is a risk that the renewed corrective action by the ADA will lead the price towards $ 0.384 in July or the beginning of August, which is about 20% down from the price on 21 July.
Fractal 2018 suggests $ 0.20 per ADA
However, a separate analysis of the ADA falls to a level deeper than $ 0.384.
Led by TradingShot, the bearish ADA forecast compares the ongoing correction with the one witnessed in the 2018 market crash, as shown below.
In detail, the 2018 chart above shows that the ADA is undergoing a variety of bearish rejections near the 50-day EMA (orange wave) but is heading downward in a declining channel pattern. The declining trend of the symbol disappeared after correcting by almost 93% from the local peak.
“Based on 1D RSI terms, we also appear to be in the third (3) and final stages below the crash,” TradingShot wrote, adding:
“So if the owners of ADA want to avoid this, they need to see the price break above 1D MA50 and maintain trading above it for at least a week. Otherwise, a -93% drop from the top can be completed at around 0.200.”
When a hard fork?
The latest ADA price correction appeared in the days before Cardano’s hard fork.
Called “Vasil, “the hard fork was supposed to take off in June but was delayed until the last week of July due to some outstanding defects. Nevertheless, as of July 21, Input Output Hong Kong (IOHK), the company behind the Cardano blockchain development, has not given an exact date.
Vasil is expected to introduce significant performance and capability upgrades to the Cardano blockchain, including faster blockchain creation and faster conversion rates. From a basic standpoint, the update could increase ADA uptake due to improved network efficiency.
But Cardano has a history of recording sharp price corrections after most online updates, suggesting the prevailing “sold news” attitude in the market.
For example, Alonzo upgrades the blockchain in September 2021, the ADA partially caused it to rise by more than 200% to its record high of $ 3.16. But after the upgrade, the Cardano symbol fell by more than 85%.
ADA has risen just 25% after hitting $ 0.384 on May 10, indicating that Vasil’s impact on the market has been limited.
But not everyone is convinced. For example, analyst Lark Davis believes the symbol will “rip” after the hard fork, as it manages to hold 50 days of EMA in support.
– Lark Davis (@TheCryptoLark) July 20, 2022
Until then, the ADA is likely to be under pressure to “sell news”, putting even more pressure on persistent macroeconomic risks and their negative effects on the cryptocurrency market.
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