- ADA charts paint a short-term bearish picture
- Cardano prepares to deploy smart contracts mid-September
YEREVAN (CoinChapter.com) – Cardano open-source platform’s native token ADA lost 14 percent off its $2.96 Monday peak and traded at $2.72 in Wednesday’s early London session. The charts flash a possible correction continuation down to $2.55 in the upcoming sessions.
What’s in store for ADA?
On the four-hour chart, the latest correction is visible in more detail. The price action sought support from the 20-4h exponential moving average (EMA-20; blue wave on the chart below).
The digital asset consolidated around the EMA-20 for the past two days. Cardano could come out of the consolidation with an uptrend, but the daily chart says otherwise.
According to the 1D chart technicals, ADA could see more correction and drop to the resistance-turned-support at $2.55. In addition, the relative strength index (RSI: purple graph at the bottom) on the chart below registered a red flag for traders.
The RSI has been in the overbought territory (above 70) since August 9. It briefly dipped back to 68 on August 17 but climbed back in the past week. Typically, when the RSI is higher than the 30-70 range, traders perceive the price as overbought and might refrain from betting on an “overbought” coin.
The fundamentals behind Cardano’s recent rally are still strong as the platform prepares to launch smart contracts on the mainnet.
Cardano will soon build its ecosystem with the deployment of smart contracts on the platform. The launch of smart contracts on the mainnet will signify the end of the Goguen era. The network completed its last Alonzo testnet and announced the final deployment date to be September 12.
There are several projects already scheduled to run on Cardano once the smart contracts launch. In addition, the upgrade will help push Cardano into the $100 billion Decentralized Finance (DeFi) industry and become a competitor to Ethereum.
While the fundamental upgrade promises future gains for ADA, its charts paint a bearish short-term picture. The overbought RSI and the brief consolidation could lead to a price correction in the upcoming sessions. Currently, the price action is seeking support from the EMA-20 on the four charts.