Cardano (ADA) drops 6% after smart contract deployment; what’s next?

cardano ada alonzo hard fork, smart contracts,
“slip” by MarkyBon is licensed under CC BY-NC-SA 2.0

Key Cardano Takeaways:

  • Alonzo hard fork launched on Cardano blockchain on September 12.
  • The first dApp on the Network faced difficulties right after launch.
  • ADA uptrend anticipated.

YEREVAN (CoinChapter.com) – Cardano (ADA) open-source blockchain launched its much-anticipated smart contracts functionality on Sep 12, 15:00 Pacific Time.

However, the so-called “Alonzo” rollout was not accompanied by bullish price action. Instead, the ADA value dropped 6 percent overnight. Is it the “buy the rumor, sell the news” adage in action?

In detail, the concept entails that often anticipation of an upcoming event is more profitable than the event itself. Thus the price of a stock or crypto can surge before a scheduled upgrade, then consolidate afterward. Cardano rallied for a month prior to the hard fork, hitting an all-time high of $3.09 on Sep 2.

Alonzo hard fork

After several successful testnets, the smart contract capability runs on the mainnet, and the network is ready to launch dApps. Cardano announced the news right after the deployment, signifying the end of the Goguen era.

New capabilities should strengthen Cardano’s position as an Ethereum competitor. The largest DeFi network features 15 transactions per second (TPS) speed, while Cardano claims to offer 250 TPS and has lower gas fees.

But the dApp adoption wasn’t all smooth. The first dApp to run on the mainnet was Minswap, a multitool exchange. However, it shut down shortly after launch, citing difficulties at running multiple transactions simultaneously.

Some rival supporters, like Ethereum investor Anthony Sassano, jumped on the opportunity and bashed Cardano, calling it the “biggest joke in crypto”.

However, some experts believe Cardano supporters shouldn’t be discouraged. According to Michael Van De Poppe, founder, and CEO of trading consultancy platform Eight BV, Cardano technicals look strong despite the setback and the digital asset could pump up to approximately $4.5.

Also read: Cardano (ADA) consolidates: An “FUD storm” or a FOMO base?

ADA Price Prediction

The analyst pointed out, that overthinking the significance of upcoming events on the blockchain can hurt the accuracy of a price prediction. Whether Cardano price followed the “buy the rumor, sell the news” pattern, is not yet clear, but Mr. Van de Poppe claimed that technicals point to an uptrend underway.

On the ADA/BTC chart, the CEO drew crucial support levels (0.00004635 and 0.00005055 BTC) that will be instrumental in determining the token’s future vector. ADA retested the higher support already, which gave the analyst ground to suggest the uptrend. If the digital asset slips down, it will still have the second support to meet.

ADA/BTC daily chart.
ADA/BTC daily chart.

On the ADA/USDT daily chart, the analyst also determined significant support bars. He used the Fib retracement levels and pinpointed the 4.5USDT level as a potential target for the digital asset.

ADA technicals point to an upcoming bullish phase.
ADA technicals point to an upcoming bullish phase.

Also read: Cardano (ADA) ready to run for $5, popular analyst says

As of the moment, the ADA/USD exchange rate came in at $2.42 in the Asian-Pacific session Monday, after dropping 6 percent overnight. The digital asset sought support from the $2.30 line earlier in the day. It also slipped below the 20-day exponential moving average (EMA-20) on September 7, for the first time in a month.

Cardano slipped 6 percent after Alonzo rollout. Source: ADAUSD on TradingView.com
Cardano slipped 6 percent after the Alonzo rollout. Source: ADAUSD on TradingView.com

The upcoming month will show if the “buy the rumor, sell the news” adage plays out, or Cardano will prove to be a profitable long-time investment. The increased capabilities on the network and technical analysis suggest the latter.

Also read: Cardano chief Hoskinson says, “We as an industry, won”, expects other countries to follow El Salvador’s lead

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