Cardano (ADA)

After seeing some buying resurgence, Cardano [ADA] surrendered to the growing bearish impetus in the broader market. September has not been kind to the assets and the blues were felt across the leaderboard. The month saw a myriad of mini-crashes. While ADA has continued to stay afloat and dodge several damaging pullbacks, it still failed to recover from the weekly losses that now stood a little over 5%.

Over the past 24-hours, Cardano [ADA] depreciated by 4.07% which pushed its price to $2.26. The crypto-asset held a market cap of $72.36 billion while registering a 24-hour trading volume of $5.88 billion, at the time of writing.

Cardano [ADA] Daily Price Chart:

Cardano’s [ADA] daily chart depicted the formation of a descending parallel channel, a breakout from which could result in bulls’ favor. As a result of the subsequent market corrections, ADA traded below the 50 DMA [Pink], which was an increasingly bearish sign. The 100 [Blue] and the 200 [Yellow] daily moving averages, on the other hand, supported the asset’s price ceiling. But the low volume hindered possibilities of upward traction.

Additionally, most of its indicators were under bearish control. The dotted markers of Parabolic SAR, for one, moved below the ADA price candles depicting the bearish dominance. The Chaikin Money Flow [CMF] also struggled to make headway above the zero-line as the capital outflow from the coin market continued. The Relative Strength Index [RSI] also settled below the 50-median line in response to rising sell pressure.

The above chart signaled that the only hope for Cardano is the descending parallel channel. Alternatively, losses could extend towards the support areas of $1.97 and $1.85, which, in turn, would warrant a strong reaction from buyers. It is also important to note that any movement below this would lead to additional bleeding. Besides, the resistance levels were found to be at $2.63, and $2.9 respectively.

Cardano’s [ADA] price rise this summer has been nothing short of spectacular. The euphoria surrounding the implementation of functional smart contracts has been driving its price to new heights. With the upcoming hard fork just hours away, FOMO has engulfed the cryptocurrency market. But what follows next might not favor the bulls.

Historically, when ADA crowds get overly excited or fearful, the price tends to drop. This trend was observed by the popular crypto-analytic platform Santiment which tweeted,

“Cardano jumped a quick 12.5% in the past 15 hours following last week’s FUD toward the 3 market cap crypto project. Social spikes continue to tell the story. When the ADA crowd gets overly hyped or fearful, the price trend will typically shut down.”

Not just FOMO, Cardano ecosystem sees massive FUD

Cardano-related FUD influencing social sentiment isn’t new. While FOMO has intensified as the market participants anticipate a protocol upgrade that will expand the network’s utility, FUD engulfed the Cardano ecosystem’s DeFi frontier. As a result, the blockchain network and the teams behind it have faced severe criticisms from the Ethereum community.

One such is Polygon advisor, Anthony Sassano, who also happens to be one of the most vocal critics of ADA. Sassano recently opined that the blockchain network cannot “peer review” its way out of “fundamental issues” such as concurrency while referring to Minswap, the first-ever DApp to go live on Cardano public testnet multi-pool DEX.

It all started when many Minswap users revealed facing difficulties with respect to using the token swaps that started getting concurrency-related errors. The Minswap team addressed the issue in the following tweet:

Shortly thereafter, many in the community blamed Cardano’s decision to use the Extended UTXO accounting model and speculated that all the decentralized finance [DeFi] DApps powered by the network would experience the same concurrency problems such as Minswap. They also raised questions regarding the viability of smart contracts infrastructure on top of the blockchain.

Responding to the accusations, Rick McCracken, the host of the Cardano Effect podcast, said that Minswap’s concurrency issues are “being blown way out of proportion by FUDsters.” Following the fiasco, Minswap confirmed shutting down its testnet temporarily.

After a week full of choppy trading sessions, Cardano [ADA] was down by 6.46%. This comes amidst fresh buying in the rest of the crypto market which rose to a 4-month high of $2.38 trillion valuations. Select altcoins have also hit fresh peaks this week. ADA, on the other hand, have faced negative pressure. After establishing an all-time high on the 2nd September, the bears have thwarted several attempts by the bulls to pierce through the level and surge. As a result, the volatility in the coin market took a significant hit.

Over the past 24-hours, Cardano [ADA] fell by 9.02% which drove its price to $2.64. The 3rd-largest crypto asset recorded a market cap of $90.3 billion and a 24-hour trading volume of $4.62 billion. Will Cardano pick up momentum and resume its up-move or will the bears pull the price below key support level?

Cardano [ADA] Daily Price Chart:

The moving averages aligned below the ADA price candles after an astonishing run-up above $3-level. The bullish momentum was cut short as sellers made their way.

The rising gauge between the 50 DMA [Pink] and other moving averages such as 100 [Blue] as well as 200 [Yellow] hinted a positive sentiment. However, the low trading volume has failed to back up the uptrend.

The red closing bars of Awesome Oscillator [AO] depicted a growing bearish momentum in the coin market. The MACD also flashed red as buying demand took a plunge. The daily Relative Strength Index [RSI] also displayed a similar market sentiment as it fell close to the 50 median line as sellers rose to prominence.

Cardano [ADA] needs to stay afloat above the support area of $2.53, to avoid retesting to lows of $2, $1.71, and $1.52. The resistance levels, in an unlikely case of a bullish reversal, could take the price of the asset to $2.96.