Key Takeaways:
- Bitcoin dragged ADA into a 10% decline.
- Technicals indicate a much larger avalanche ahead.
- The latest reports of Cardano NFT’s success are not based on heightened demand but rely on wash trading.
YEREVAN (CoinChapter.com) – Bitcoin’s recent plummet below $26,000 caused a ripple effect on the altcoin market. Cardano’s ADA price slid 4% on Aug 22, reaching $0.25 ahead of the New York hours and totaling its 7-day losses at over 10%.
Notably, the Cardano coin price held on to a significant support line, relevant since early 2021. But ADA technicals pointed to a possible 80% plunge if the price action slides any lower.
ADA in a descending triangle
The rank #7 coin traded within a bearish formation known as the “descending triangle” since early 2023. The formation featured the flat support line mentioned earlier and a dropping resistance that gradually lowered the price swing.
ADA retested the support line twice last week, hinting at a possible breach, the first since 2021, due to the active selloff. In detail, the coin’s trading volumes increased by over 14% in the previous 24 hours. Moreover, the triangle predicts a drop equal to the maximal formation height.
If the prediction has merit, ADA price could drop an additional 80% in the current quarter to reach $0.05, a three-year low for the Cardano coin.
The altcoin’s future price action also heavily depends on the overall crypto market climate. As of writing, the predictions are sour due to the continuous macro-led Bitcoin declines.
The uncertainty on the Binance Chain also exacerbated the selloff fears and could trigger a withdrawal wave across the top 10 altcoins.
Meanwhile, Cardano boasted bullish developments on the NFT front, which are worth a mention.
Cardano NFTs boom amid the chaos? Not so fast
According to the weekly chart shared by NFT news and data source Stocktwits NFTs, the Cardano NFT floor price index sat 22% above Ethereum’s.
However, ADA bulls shouldn’t celebrate just yet. Despite the rising floor prices, Cardano is NOT primed to dethrone Ethereum soon. The latter still commands a dominant position regarding daily NFT sales volume.
According to NFT tracker CryptoSlam, Ethereum’s daily volume on Aug 22 stood at $10 million, with a 31% daily increase. Conversely, Cardano mastered only $205,400 in sales after a 12% daily drop.
As seen in the chart above, Cardano’s wash rate also rocketed 275%, revealing an alarming tendency among NFT traders.
In detail, wash trading is when the buyer and seller are the same person or two colluding. It’s banned in conventional financial markets because it misleads the rest of the market about the true level of demand, distorts prices, and entices others to trade on fake information.
Thus, the raised floor prices might not indicate an actual rise in demand but rather an illegal tendency to overinflate NFT costs.
