Key takeaways:
- ADA, the Cardano-backed cryptocurrency, fell by 17.66% on Monday, its sharpest decline since the May 19 crash.
- The crypto may find support for a turnaround near the 200-Day SMA line at $0.98
- It may be a BTFD opportunity for investors, as ADA has rebounded from the $0.98 price level repeatedly in the past.
ADA, the native cryptocurrency of blockchain and smart contracts platform Cardano, has declined by 56.36% from its 2021 YTD high of $2.514, which it reached on May 16. Since the crypto market corrected on June 14, nearly all major cryptocurrencies have been in a freefall. The downward push saw the token’s market cap reach $35.4 billion, almost half of its highest value of $71.5 billion.
ADA – Silver Lining In The Clouds?
ADA maintained its prices above the token’s 2018 high of $1.3979 (Jan 5, 2018), even after May’s cataclysmic market crash. However, the token crossed below the level on June 18.
The latest retest of the triangle support at $1.08 is weak due to lower trading volumes. ADA prices have fallen below the previous support of $1.256, and with the weak support at $1.08, bulls might not participate in rallying the price at this level.
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ADA has fallen below the 50-Day Moving Average (Green) line and is inching towards the 200-Day MA (Violet) line. As such, it may lead to a testing of the psychologically important level of $1.00.
However, the 200-Day MA price level of $0.98 has been historically strong support. ADA has tested the support on May 19, April 23, and throughout February. As a matter of fact, the support often came in the form of bearish wicks, which means that the Cardano token did not stay at $0.98 for long and bounced back quickly.
Although the price has remained below the 20-Day EMA, a BTFD opportunity might present itself at the $0.98 mark if the price pattern follows historical trends.
The token’s relative strength index remains at the oversold level of 32.25, the token’s lowest in 2021. However, the weekly technical indicators remain neutral.
At the time of writing, ADA was trading at $1.109.
Cardano – Not Out For The Count
Cardano is a public blockchain and smart contacts platform, which uses a proof of stake algorithm for consensus. It was developed by one of Ethereum co-founders, Charles Hoskinson.
In April, the platform announced significant partnerships with the African nations of Ethiopia and Tanzania. In Tanzania, Cardano’s parent company, Input-Output Global (IOG), will facilitate mobile internet connectivity, financial empowerment projects, and digital identity for rural communities.
Ethiopia aims to decentralize the education sector using Cardano’s technology. With that goal in mind, the country will implement a blockchain-based student and teacher ID system, which will help boost education and employment. Ethiopia also plans wider adoption of blockchain-based technologies across other sectors, which means Cardano may partner on other projects.
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Earlier this month, IOG’s Director of African Operations, John O’Connor, mentioned that another significant Cardano deal is in the works. However, he was tight-lipped about the details, hinting at a partnership between the Government and the private sector relating to payments and finance.
In a tweet, Mr. O’Connor also mentioned bringing on board 1 million additional users.
The Director of African Operations also mentioned that the upcoming deal would use the Alonzo smart contracts. Alonzo is an update to the existing Cardano blockchain that will introduce new features to the network. Smart contracts will be enabled on the network through the integration of Plutus scripts.
Cardano has significant fundamentals to help propel its token’s upward rally. However, it will need investors to buy the dip for ADA to rebound from its next support level.
