Summary of Cardano’s Current Situation π
If you are following Cardano (ADA), you have likely noticed its challenging journey over the past few months. Despite facing obstacles, several encouraging trends could impact its future. Specifically, the emergence of smart contract applications is noteworthy and may shape ADAβs potential trajectory as the market evolves. While the environment remains volatile, there may be signs of recovery on the horizon.
Current Performance Review π
Cardano (ADA) has experienced a continuous decline since March, characterized by a series of lower highs and lower lows. As broader market adjustments took place in August, ADA fell from its position among the top ten cryptocurrencies by market capitalization.
As it stands, ADA is trading at approximately $0.361. The pricing over the past month has seen a modest recovery, recording an increase of 2.55%. Consequently, the year-to-date (YTD) losses now stand at 39.09%.
Smart Contract Advancements π οΈ
Although the token has faced significant challenges this year, some developments are encouraging. Notably, Cardano has witnessed remarkable growth in its smart contract functionalities. The number of active Plutus scripts has leaped from a mere 8,083 to 91,470, reflecting a surge in smart contract utilization within the Cardano ecosystem.
While this trend looks positive, it may not immediately influence the price of ADA in the short-term. Recent technical analysis, however, suggests there may be a potential for upward movement in ADAβs price soon.
Analyzing the Cup and Handle Pattern π
Beginning on October 15, Cardano began to form what analysts refer to as a βcup and handleβ chart pattern. A well-known trader documented this development, highlighting that the formation appears orderly.
The characteristics include:
– A rounded cup shape
– Diminishing volume as the cup’s bottom is reached
– A retracement in the handle that hasn’t disrupted the overall pattern
Additionally, as the price enters the βhandleβ portion, a rise in volume accompanies it, further supporting the legitimacy of the chartβs development.
However, itβs important to note that this entire chart pattern has materialized within a week, while generally, a credible cup and handle pattern requires several weeksβtypically between six and sevenβto develop properly.
That said, this doesnβt negate the possibility that the traderβs prediction could come to fruition. It is crucial to remember that chart patterns are not inherently reliable, and they rely on probabilities rather than certainties.
Risk Management and Target Assessment π―
The trader has set a stop loss at $0.338, while targeting a profit at $0.394. If ADAβs price reaches this target, it would result in a return of around 9.14%, while triggering the stop loss translates to a loss of about 6.37%.
While these target projections are somewhat conservative, some analysts like TradingShot are optimistic, citing a recent bullish cross as a significant buy signal. This could potentially push ADA’s price as high as $5 in the longer-term perspective.
Ultimately, whether this chart pattern will unfold positively remains uncertain. While it has not yet been invalidated, the recent hourly candlesticks suggest bearish sentiment, necessitating cautious observation.
Hot Take π₯΅
For you, as a crypto enthusiast or investor in Cardano, the situation is one to watch closely. The developments in smart contracts are exciting and could play a role in the tokenβs recovery. Existing patterns suggest that while there might be potential for a bullish trend, the market remains unpredictable. Always approach market developments with an informed perspective, and remain vigilant about potential shifts in trends.
Sources:
– TradingView
– Plutus Scripts
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