Key Features
- Cardano reached a new milestone as ADA staking addresses cross 650,000.
- However, price trends for its token, ADA, forecast a major pullback.
- Cardano may reach El Salvador soon.
Cardano, the smart contracts and decentralized protocol platform, crossed 650,000 staking addresses on its network, with 2660 active staking pools. The staked tokens now value $30.35 billion in total, accounting for 71.24% of Cardano’s native token ADA’s total supply. However, the achievement may not be enough to limit ADA’s short-term bearish bias.
ADA Price Trends Not Optimistic
ADA has been trading in a descending triangle pattern. For the uninitiated, the descending triangle is a continuation pattern, i.e., it tends to send prices in the direction of its previous trend upon a consolidation move.
The Cardano token rebounded off the $0.98 support level on June 22. Although ADA/USD prices have gained over 33.7% since then, the bulls seem to have hit a wall at the $1.5-resistance level.
As the token’s price follows the continuation pattern, a pullback from the downtrend line could have traders retest $1 as support. Furthermore, ADA has not been able to close below the said level since Feb 23. Thus, if ADA breaches the $1-mark, it may result in panic selling.
Also Read: Cardano eyes 10-15% decline as ADA fails to break multi-month trendline resistance
The next support level is at $0.80, but if selling intensifies, prices could drop further. Resistance for ADA token is at $1.5, then at $1.75.
ADA has been trading below the 50-Day Moving Average (Green) and 100-Day Moving Average (Yellow) lines but above the 200-Day Moving Average (Red) line. Moving Averages are a trend indicator created by taking the average closing prices over a given duration. As such, ADA is in a downtrend on a short-term basis but in an uptrend on a long-term basis.
ADA’s momentum, although bearish for now, seems to be bottoming out. The MACD line was below the MACD signal line but has curved upwards and may cross above the signal line. Although RSI is still below 45, the MACD histogram bars are rising, suggesting an upswing may be in the works.
At the time of writing, ADA was trading at $1.316, down by 1.68% since morning.
Cardano: Staking Boom And Other Developments
In simple terms, Staking means locking a token to participate in transaction validation on a PoS-based network. In Cardano, the size of a stake in the network is proportional to the amount of ADA held. A stake pool on the network will receive a monetary reward to add the next block to the blockchain, and all the members share the reward.
Also Read: Chainlink chokes bearish outlook despite LINK crashing over 12% intraday
As per Pooltool data, ADA staking addresses rose from 600,000 on June 3 to 664,300 addresses at the time of writing.
The 10.71% rise comes just weeks after the Cardano network broke through the 600,000 active addresses milestone. Staking keeps the active supply of ADA tokens in check, while the monetary rewards offered help boost the token’s demand. As a result, an increase in staking addresses may serve as bullish fuel for an uptrend.
In other news, Cardano founder and IOHK CEO Charles Hoskinson announced his plans to bring Cardano to El Salvador, the first country to adopt a cryptocurrency as legal tender. In a live broadcast, Mr. Hoskinson mentioned that his team contacted authorities and submitted the required documents for a state visit.
The Cardano founder’s plans fall in line with Cardano’s efforts to globalize its activities, such as IOHK’s tie-up with the Ethiopian government to digitize the education sector.
Although ADA prices are treading through bearish waters, the token has strong fundamentals to reverse the trend. All it needs now is some support from the bulls at its vital support level.
