Key Takeaways:
- Cardano’s native token ADA fell over 15% on Wednesday.
- The price action came after news of eToro restricted ADA trading in the US.
NEW DELHI (CoinChapter.com) — Cardano (ADA) extended its downtrend Thursday to hit its worst levels since Aug 10.
The ADA price had been trending lower after reaching its record high of $3.16 on Sept 2, recording a net 48% loss on rising profit-taking sentiment. That included over 16% losses recorded in November alone, with additional headwinds coming from eToro, an Israel-based online brokerage firm.
eToro recently announced that it would restrict clients from the U.S. from investing in Cardano (ADA) and Tron (TRX). Shortly after its announcement, the TRX price fell 7.3%, while ADA plunged 15.65% to $1.5818.
“We Didn’t Even Get Delisted”
Cardano founder Charles Hoskinson took to Twitter to alleviate investors’ panic. He retweeted Crypto Capital Venture founder Dan Gambardello’s tweet that highlighted eToro’s decision to facilitate ADA traders, at least for its non-U.S. customers.
Furthermore, Gambardello also pointed out that Cardano recently announced listing on Bitstamp, an exchange with a $513 billion trading volume per day. In comparison, eToro’s daily trading volume came out to be only $67 billion.
Also Read: Cardano News: Founder Charles Hoskinson talks about Metaverse & Regulatory Enforcement.
eToro also released an additional statement, clarifying that the limitations only applied to U.S. customers. The announcement also highlighted the finer points of its restrictions, stating that eToro U.S. would stop opening new positions on ADAUSD within its platform after Dec 26.
In addition, the firm also revealed that its U.S. would not receive ADA-based staking rewards after Dec 31. In detail, eToro will pay out the final staking rewards in the U.S. dollar on Jan 15, 2022. Moreover, by Q1 2022, U.S. users will not be able to close existing positions.
Note: eToro is working to extend wallet support for ADAUSD so users can transfer assets off-platform.
Please understand that these changes are due to business-related considerations in the evolving regulatory environment.
Excerpt from eToro’s blogpost
The eToro announcement adds more woes to an already beleaguered Cardano, which is in a two-month-long downtrend. Though smart contracts arrived on Cardano in Sept, DApps that use them has not taken off on Cardano.
DeFi Llama, a platform that tracks TVL in DeFi contracts, is yet to list Cardano. It seems Cardano is behind other Ethereum competitors like Solana (SOL), Avalanche (AVAX), etc.
Cardano Price Chart
Cardano prices are unable to break above the Sept-Nov descending trendline. Moreover, ADA moved below its 200-day moving average trendline on Nov 21, making the Cardano token bearish across all time horizons. Recent positive Cardano news, such as the Bitstamp listing, failed to reverse the downtrend.
If Cardano bulls begin an uptrend, ADA would first test immediate resistance at $1.73. ADA would then push towards its 200-day M.A. line, above resistance at the $1.82 price level. After flipping 200-day M.A. from resistance to support, the bull run continues. ADA would likely target $1.91, near the 26-day EMA line, before any corrections occur.
The $1.91 resistance level earlier supported the Cardano token from Aug 13 to Nov 16. As such, a move above this resistance level would likely act as a bullish catalyst.
Also Read: Cardano eyes 36% breakout as ADA prints bullish technical formation.
On the other hand, ADA’s current downtrend would likely bring prices down to support at $1.59. The immediate support for ADA earlier acted as a resistance for the Cardano token between Jun 10 to Aug 10. If the current bear run continues, ADA could breach below immediate support to reach $1.52.
Moreover, a marketwide sell-off could see support at $1.44 come into play.
Trend-based momentum oscillator MACD continues to be bearish for the Cardano token. Bars on the MACD histogram seem to be increasing in magnitude, indicating the MACD line (difference between 12-day and 26-day) is moving further away from its signal line (9-day EMA of MACD).
The MACD line staying below its signal line forecasts ADA’s momentum is currently bearish. Meanwhile, the relative strength index for the Cardano token is dangerously close to oversold regions, clocking 30.58 on the daily charts.
An RSI below 30 forecasts a trend reversal in the works for an asset. Cardano bulls would hope the theory comes true for ADA.
At the time of writing, ADA was trading at $1.66, down 0.37% on the day.
