Cardano’s (ADA) price fell along with the other top cryptocurrencies on Monday. And that although the hard fork with the name “Alonzo” was carried out and smart contracts came onto the platform.
The ADA / USD rate fell 10.67 percent and hit its intraday low of $ 2.30. That’s partly due to sales from dealers after the pair rose 1,200 percent this year. In addition, this intraday sale coincided with a general decline in the crypto market. The top cryptocurrencies Bitcoin (BTC) and Ether (ETH) fell by 4 percent and 6.97 percent, respectively.
The slump at Cardano coincided with the introduction of the long-awaited smart contracts on the public blockchain. The project wanted to benefit from the booming, decentralized financial system (DeFi) and from non-fungible tokens (NFT). It also wanted to solve the problem with the slow and expensive transaction fees on the leading smart contracts platform Ethereum
As a result, there was great expectation of a prolonged upward boom for ADA. The Value Trend, a financial analyst at Seeking Alpha, expected Cardano’s native token to rise to $ 10 as the project overtook Ethereum and became the leading smart contracts platform.
Overall, this expectation contributed to the ADA / USD pair seeing strong gains ahead of the Alonzo upgrade. On July 20, the pair was up to $ 1. On September 2, it climbed to a record high of $ 3.16. That’s an increase of 200 percent.
Further positive signals
Bullish assets tend to stagnate or correct after a sharp rise and consolidate as some traders sell too. At the same time, the assets sold are moving from weak hands to long-term optimistic investors.
The following Cardano chart suggests a similar period of consolidation after ADA rose 200 percent on a strong bull run. The likelihood that the ADA / USD rate will continue its uptrend is therefore high.
The rectangle pattern looks like a bull flag. And usually the profit target for bulls on a bull flag is equal to the length of the previous uptrend.
If the ADA / USD pair breaks above the bull flag’s upper trendline (at $ 2.93) it could rise towards $ 4.50.
In addition, the ADA should hold above its 50-day moving average. This is near $ 2.27 and would be needed to maintain positive momentum. A decline below the bull flag support and the 50-day average would push ADA back to $ 1.92. The support line from mid-August can also be found here.
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Some analysts have also expected lower price targets. Trader Twitterati saw a false bottom and said traders would sell when the time comes.
#Cardano smart contract upgrade so far going as I have predicted: Sell the news.
The price also formed a double top and now forming a lower low. If $ 2.25 is breached then down we go even more.
$ 1.20 soon? pic.twitter.com/riFirqmCgz
– Rautakansleri (@rautakansleri_) September 13, 2021
Cerbul is also a market analyst and saidThe ADA slump was not due to the so-called “sell the news” sentiment, as more capital from the DeFi sector flows into the Cardano ecosystem.
“Accumulate,” as he briefly summarized.
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