Key Takeaways:
- Cardano's ADA risks a 70% decline based on bearish technicals.
- The upcoming Vasil upgrade promises to boost Cardano's throughput.
- Will it boost ADA?
YEREVAN (CoinChapter.com) – ADA, the native token of the 8th largest cryptocurrency Cardano, traded at $0.95 on Apr. 16, after a week of sideways consolidation. However, the token flashed a flurry of bearish technicals that could leave ADA in a ditch after a 70% crash.
ADA daily chart
As CoinChapter previously reported, the digital asset has traded in a formation dubbed the Descending Channel since September 2021. The setup entails two parallel trendlines restricting the price action and resulting in consecutive support and resistance retests.
ADA temporarily broke the Channel’s resistance in late March. But Cardano bulls failed to put enough weight behind the rally. So the token slid back into the pattern and retested the upper trendline as resistance.
Also read: Cardano-based smart contracts surpass 2,000 mark.
Citing the Channel’s ongoing relevance, ADA could face a further decline toward the formation’s support line, which would constitute a 70% drop for the token. Furthermore, the forecast places the target price just above $0.2, ADA’s lowest value since Jan. 2021.
Cardano’s trading volumes did nothing to contradict the prognosis, as they had been steadily declining since Mar. 23. Moreover, the trend-based indicators agreed with the bearish outlook.
The Relative strength index (RSI; purple graph at the top) charted between 40 and 50, showing low interest from traders. Another trend-based oscillator, MACD, also printed bearish red bars on the histogram.
Also read: Cardano (ADA) close to finishing Q1 at a 14% loss — what’s in store for Q2?
Meanwhile, the Cardano network is preparing for a “major” Vasil upgrade coming in June.
Vasil upgrade on Cardano
In detail, the upgrade’s primary goal would be to boost the transaction throughput, volume, and liquidity on the network. Cardano’s need for scalability solutions increased with the introduction of smart contract functionality last year, which translated into much higher volumes of transaction activity.
Matthias Fitzi, a research fellow at Cardano, explained that the most logical way to boost throughput would be enhanced block sizes. However, enhancing block size would require an improved consensus layer to retain the rate of block production; hence the Network would need “diffusion pipelining.”
Also read: ADA at crucial resistance as Milkomeda C1 launched on Cardano.
Charles Hoskinson, the founder of Cardano, commented on Vasil, calling it “major major major major.”
As many of, you know, a major major major major major hard fork combinator event is happening in June, which is the Vasil hard fork, and that is going to contain pipelining [one of the pillars supporting Cardano’s scaling], which will be a massive performance improvement to Cardano.
said Hoskinson.
He also asserted that the mentioned pipelining “looks ready for June release” and will bring a flurry of improvements to the Network.
In combination with parameter adjustments, these features will enhance Cardano’s throughput and optimize the system to accommodate an increasing range of decentralized finance (DeFi) apps, smart contracts, and DEXs
added the executive.
Also read: Cardano rises 28% this week as ADA’s richest investors resume accumulation spree.
However, Cardano’s native token has yet to respond to the upcoming improvements. The months ahead will show if Vasil can pull ADA out of the ditch.
