Cardano Price: ADA Witnesses Supply Pressure Amid Market Volatility
The price of ADA, the native cryptocurrency of the Cardano ecosystem, has experienced significant supply pressure in recent days. This has led to a decline in price from $0.81 to $0.61, a drop of 23.2%. The broader market correction has further intensified this downward trend, causing a breakdown from the 23.6% Fibonacci retracement level. The question now is whether the BTC price will fall below the psychological level of $65K and accelerate this correction trend.
Cardano Leads in Developer Commitment Despite Market Volatility
The mid-term trend for Cardano’s price remains bullish, as evidenced by a rising channel pattern on the daily chart. This chart setup, consisting of two ascending trendlines, has propelled ADA’s value from $0.24 to $0.81, representing a growth of 283%.
Data from IntoTheBlock indicates that Cardano is leading in terms of blockchain development activity among top Layer 1 (L1) protocols. The platform consistently records the highest number of weekly commits on their repositories, which is often seen as an indicator of developer engagement and project vitality.
Cardano is leading in developer activity amongst top L1s, consistently delivering the highest number of weekly commits. pic.twitter.com/gtYUIyeqRy
— IntoTheBlock (@intotheblock) March 18, 2024
However, the presence of overhead supply at $0.8, combined with the broader market correction, has triggered a new round of selling pressure and pushed the ADA price down to $0.62. If this supply pressure continues, sellers may push the price down by another 7% to test the lower trendline at $0.57.
Based on historical patterns, there is a possibility that Cardano will rebound from this support level and initiate a new bull cycle within the channel pattern. With sustained buying pressure, the post-correction rally could surpass the $0.81 resistance level and potentially achieve a growth of over 30%.
On the other hand, if there is a breakdown below the support trendline of the pattern, it would invalidate the bullish thesis and prolong the current correction trend.
Technical Indicator:
- Moving Average Convergence Divergence (MACD): The negative crossover between the MACD (blue) and signal lines (orange) indicates a bearish short-term trend.
- Exponential Moving Average (EMA): The ADA price trading above the 100-day and 200-day EMA slopes suggests a bullish long-term trend.
Hot Take: Will ADA Bounce Back or Continue to Decline?
The recent supply pressure and market correction have affected the price of ADA, causing a significant decline. However, Cardano’s strong developer commitment and its position as a leading L1 protocol indicate the potential for a rebound. Here are some key points to consider:
- The mid-term trend for Cardano remains bullish, supported by a rising channel pattern on the daily chart.
- Cardano consistently outperforms its peers in terms of developer engagement and project vitality, as evidenced by the high number of weekly commits on their repositories.
- If the supply pressure persists, the ADA price may continue to decline further, potentially testing the lower trendline at $0.57.
- However, based on historical patterns, there is a possibility of a rebound from the support level and a new bull cycle within the channel pattern.
- To validate the bullish thesis, it is important to monitor whether the price breaks below the support trendline or manages to surpass the $0.81 resistance level.
As always, it is crucial to conduct thorough research and analysis before making any investment decisions. The cryptocurrency market can be volatile, and prices can change rapidly. Stay informed and make informed choices based on your own risk tolerance and investment strategy.
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