The worldwide cryptocurrency market cap increased by 1.03 percent to $1.89 trillion in the last day. The overall crypto market volume declined by 19.90 percent to $61.93 billion in the last 24 hours, according to CoinMarketCap data. The overall volume on Defi was $6.87 billion, accounting for 11.09 percent of the total 24-hour volume in the crypto market.
ADA Price Action
Despite claiming its blockchain network’s strong growth and a “big” hard fork event in June, Cardano’s (ADA) price risks witnessing a dramatic drop in the coming months.
Since September 2021, ADA has been drifting lower inside a “descending channel” pattern that has successfully stopped its several upside efforts. It accounts for around 1.75 percent of the overall crypto market capitalization.
The channel gained strength when ADA broke above its upper trendline on March 27, only to revert completely in subsequent sessions, indicating a lack of confidence among Cardano bulls.
The negative bias was aided by ADA’s 200-day exponential moving average (200-day EMA; the blue wave), as well as the 0.236 Fib line (around $1.29) of the Fibonacci retracement graph, drawn from a $2.96 swing high to a $0.78 swing low.
As of April 15, the price of ADA has been consolidating within the $0.97–$0.92 range, indicating that it intends to continue its decline from its fakeout top near $1.25.
If the descending channel configuration holds, ADA/USD could fall to its previous bottom range near $0.78, with the lower trendline of the channel around $0.65 as the key downside target.
That would represent an almost 30% drop from the current pricing.
Network Growth is not a Price Catalyst
Meanwhile, Input Output Hong Kong (IOHK), the Cardano project’s research and development firm, has announced incredible network growth through April 2022.
In a video broadcast on April 12, a day after ADA fell more than 10%, Cardano founder Charles Hoskinson used the term “significant” five times to describe the fork’s relevance to the overall network growth.
Yes, after Hoskinson’s speech and IOHK’s tweets, ADA’s price recovered. However, the recovery has slowed, and the token is now drifting sideways, still influenced by macroeconomic forces.
Notably, like Bitcoin (BTC), ADA’s correlation with the Nasdaq 100 (NDX) reached a new high on April 15, hitting 0.97 from 0.79 at the start of the year.
To put it another way, ADA’s price is currently tracking the tech-heavy index, which has lost more than $1 trillion in market capitalization since April.
Written by: Nidhi Kolhapur