Bearish View
Sell the ADA/USD and set a take-profit at 1.0.
Add a stop-loss at 1.40.
Timeline: 2 days.
Bullish View
Sell the ADA/USD and set a take-profit at 1.30.
Add a stop-loss at 1.10.
The Cardano price has been in a strong bearish trend in the past few months. ADA has dropped to $1.15, which is about 63% below its all-time high. It has a market cap of about $39 billion, making it the 7th biggest cryptocurrency in the world. This means that its investors have lost over $51 billion because its market cap jumped to more than $90 billion in 2021.
ADA Sell-Off Explained
Solana is a leading blockchain project that was developed by Charles Hoskinson, a co-founder of Ethereum. It was started in 2016 and in the past few years, the developers have been attempting to make it the best alternative to Ethereum.
Cardano is also a so-called “ghost chain”. In cryptocurrencies, ghost chains are defined as high-profile applications that don’t have a lot of projects going on. With Cardano, it is hard to find any application that is built using its ecosystem.
The reason for this is that Cardano did not have smart contract technology for a long time. This changed in August last year when the developers carried out the Alonzo hard fork, which introduced the technology.
While this was a welcome move, investors had concerns. For one, the developers had spent over five years building the technology. In the same period, some smaller and more agile projects like Avalanche and Solana had been launched.
Another concern was that the industry was now crowded. Some of the fastest-growing Ethereum-killers that Cardano is competing with are Solana, Algorand, NEAR, Terra, and Binance Smart Chain (BSc). As a result, the Cardano price has struggled because no major apps are being built using the technology.
Meanwhile, like all cryptocurrencies, it is falling because of the ongoing worries of the Fed policies. Analysts expect that cryptocurrencies will be affected when the Fed starts tightening.
Cardano Price Forecast
On the daily chart, we see that the ADA price has been in a deep sell-off in the past few months. As a result, the coin has moved below the Ichimoku cloud and the 25-day and 50-day moving averages. It is a few points below the key support level at $1.1927.
The Cardano price has also moved below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) is moving towards the oversold level of 30.
Therefore, the path of the least resistance for Cardano is to the downside, with the next key support being at $1.
