Why Cardano (ADA) May See Another Drop Before Returning To $2

It would appear that some people expect a remarkably bullish period for Cardano (ADA). After noting some highs recently, the network is still trying to find its groove after the recent market dip. Users will need to be aware of some changes regarding staking pools, even though the growth in unique wallets remains tangible. 

Also read: Dead Cat Bounce? Binance Coin (BNB) Rebounds 79% On Altcoin Market Recovery

Cardano (ADA) Price Momentum 

It is essential to analyze cryptocurrency markets before making any investments. That applies as much to Bitcoin as it does to all other markets, including Cardano. Following the recent uptrend of this altcoin, the prices have come down significantly. All markets lost nearly 50% of their value in recent weeks, and ADA is no exception.

Since hitting a peak at roughly $2.3, the Cardano price has not come close to reaching a similar value again.

Although a new uptrend is forming on the daily chart, the candle’s body may not be sufficient to keep the momentum going. Most markets still face some bearish pressure even today. For Cardano, it will prove difficult to note any upward momentum under the current circumstances.

Technical Analysis Hints At Bullish Momentum

If the analysts on TradingView are to be believed, Cardano (ADA) will see bullish momentum in the coming days and weeks. KledjiCuni is looking at a descending price channel for ADA, from which Cardano has broken out recently. Eventually, this user sees the price return to $2.4 and potentially higher. An ambitious outlook, as it will heavily depend on what other markets do.  

WyckkoffMode, on the other hand, takes a slightly more cautious yet still bullish approach. This trader expects support for ADA to be near $1.4, which isn’t too far below the current price. Having stable support levels is essential where volatile markets are concerned. For Cardano (ADA), a re-test of $1.4 may pave the way for higher prices in the future.

Ecosystem Developments

Taking a closer look at the current and recent ecosystem developments often helps gauge market sentiment. For Cardano, there are some upcoming changes regarding several of the staking pools. Over a dozen of them will retire from the network shortly, forcing users to pull out their stake as quickly as possible.

One positive note for Cardano (ADA) is how there is significant growth in the wallets department. More activity among wallet owners is often a sign of overall network growth. As Cardano has now surpassed 1 million wallets, an interesting milestone has been achieved. It will now be a matter of continuing this momentum, which may prove rather tricky.

Whereas some aspects seem to favor Cardano, the price momentum can always head in the opposite direction. Ecosystem developments and an increase in wallets do not always warrant a change in market value. As the technical analysis for ADA hints at a possible drop before the next leg up, it may be best to treat carefully for the coming days.