Cardano (ADA), a prominent cryptocurrency, has seen its price plummet by 50% since reaching a high of $0.8100 in March, now trading around $0.385. Despite a recent positive development from the U.S. Securities and Exchange Commission (SEC) declaring ADA not to be a security, the token is still grappling with significant sell pressure, raising concerns about its short-term outlook.
Over the past four months, Cardano has endured a severe price decline. From its peak in March, ADA fell by 50% and experienced an even sharper 60% drop before stabilizing in mid-July. Despite a recent minor recovery, ADA remains significantly below its previous highs. The persistent selling pressure on major exchanges like Binance and OKX, coupled with rising negative funding rates, indicates ongoing bearish sentiment.
On-chain data currently does not show any strong signs of a turnaround for ADA. Nevertheless, the SEC’s recent decision not to classify ADA as a security provides some regulatory clarity, which could potentially benefit ADA in the long term. This move by the SEC is seen as a positive step towards resolving regulatory uncertainties surrounding ADA.
Technical indicators for ADA are largely pessimistic. The token recently dropped 4.6% to $0.385, with concerns about further declines if current market conditions persist. ADA’s price is trading below both the 50-day and 200-day exponential moving averages (EMA), and the key support level is around $0.30. Should the bearish trend continue, ADA might risk falling to its yearly low of $0.3165.
Despite the overall bearish outlook, some analysts suggest that ADA might see a rebound. Santiment’s report highlights a spike in negative funding rates, which could signal an oversold condition. Historically, such conditions have led to sharp recoveries as sellers are compelled to buy back at higher prices. However, this strategy carries risks, as prices could continue to decline if the market views ADA as excessively oversold.
Looking ahead, the Chang hard fork scheduled for later this year could be a pivotal event for Cardano. This upgrade aims to enhance the platform’s smart contract capabilities, potentially impacting ADA’s future performance. The hard fork may play a crucial role in determining whether ADA can regain momentum and address current market challenges.
Cardano’s recent 50% price drop reflects broader market difficulties and persistent sell pressure. While the SEC’s decision not to classify ADA as a security offers some hope, the current technical and market indicators remain largely negative. Traders and investors will need to watch for potential signs of recovery, including the impact of the upcoming Chang hard fork and market conditions, to gauge ADA’s future performance.
August 2024, Cryptoniteuae