Cardano Could Experience a Significant Drop, Says Analyst Benjamin Cowen
Prominent crypto analyst Benjamin Cowen suggests that Cardano (ADA) is approaching a critical point where it may face a substantial decline. He points out that Cardano has been repeatedly testing a crucial support level on its weekly chart since December 2022, indicating weakening strength as buyers lose momentum.
Cowen expresses doubt about Cardano’s ability to maintain its current position above the $0.240 support level for an extended period. He anticipates a significant move for the cryptocurrency, most likely in a downward direction, before the year ends.
Cardano’s Potential Decline Linked to Decrease in Global Net Liquidity
Cowen attributes Cardano’s potential decline to a decrease in global net liquidity. He presents a chart showing that ADA’s price movements closely align with fluctuations in global net liquidity, which is calculated based on the balance sheets of various central banks around the world.
Cowen suggests that a resurgence in liquidity could eventually lead to a rebound for Cardano and other alternative cryptocurrencies. However, he cautions that such gains are unlikely to occur in the year leading up to a halving event, as this period is typically challenging for the altcoin market. The availability of excess liquidity greatly influences Cardano’s performance.
Analysis by Dan Gambardello Highlights Cardano’s Strengths
In late September, Dan Gambardello, founder of Crypto Capital Venture, conducted an in-depth analysis of Cardano. He noted that despite market volatility, Cardano has maintained its position among the top five cryptocurrencies and is well-prepared for future bullish trends.
Gambardello compared Cardano’s market cycles with those of Ethereum and found similarities in their initial bull markets and subsequent bearish declines. He also highlighted Cardano’s technological advancements, such as the introduction of Alonzo smart contracts and the rise of DeFi platforms like Sunday Swap.
Gambardello argued that Cardano’s unique staking mechanism should be included in its Total Value Locked (TVL) calculations, which would significantly elevate its ranking. He speculated that even a conservative market cap estimate for Cardano could result in a $10 ADA price, indicating its potential to compete with or surpass Ethereum in the future.
Hot Take: The Future of Cardano Hangs in the Balance
Cardano is at a crucial juncture, with analysts offering different perspectives on its future trajectory. Benjamin Cowen warns of a potential significant drop for the cryptocurrency, while Dan Gambardello highlights its strengths and potential for growth. The direction Cardano takes will likely depend on factors such as global net liquidity and market conditions leading up to a halving event. As investors and enthusiasts await further developments, it remains to be seen whether Cardano can overcome challenges and solidify its position among the top cryptocurrencies.
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