Logo
Cardano Ecosystem

Cardano Feed

08/23/2021

·

1.6K views


Cardano price eyes $3, but ADA chart fractal hints at a potential 40% correction

The ADA/USD exchange rate has moved further into its “overbought” area, suggesting that a trend correction might follow suit.

Cardano price eyes $3, but ADA chart fractal hints at a potential 40% correction

Cardano blockchain’s native asset, ADA, reached a new record high on Monday as investors pinned hopes on an upcoming smart contracts feature that expects to boost the cryptocurrency’s adoption.

The ADA/USD exchange rate topped out at $2.899 around 9:00 am UTC, raising anticipations that it would easily close above $3 in the coming sessions.

Many analysts, including pseudonymous chartist PostyXBT, noted that the Cardano token had entered a “price discovery mode.” Meanwhile, David Gokhshtein hinted that ADA/USD might continue its bull run until Sep. 12, the day Cardano is going to integrate a smart contracts feature to its blockchain via the “Alonzo” upgrade.

In detail, the Alonzo upgrade introduces a native smart contracts development language called Plutus to the Cardano ecosystem. Plutus is already available for testing and brings functional programming to smart contract creation to everyday users.

As a result, ADA bulls anticipate the token’s adoption to boom in the sessions ahead as Cardano attracts decentralized application developers — operating in the emerging decentralized finance and nonfungible token sectors — to its smart contracts ecosystem.

Overbought risks

But Cardano’s technical indicators predict a short-term shock, something that might have the ADA/USD corrected lower by as much as 40% despite maintaining its long-term bullish outlook.

The Cardano token’s daily relative strength index (RSI) has ventured deeper into overbought territory, at around 83. Traders consider an RSI reading above 70 as overvalued. As a result, it prompts them to sell the asset to secure maximum profits.

ADA/USD daily chart featuring RSI correction fractal. Source: TradingView

For instance, a run-up in ADA/USD rates in the first quarter of 2021 pushed its RSI reading above 90. Later, the pair started consolidating sideways while maintaining support near its 50-day exponential moving average (50-day EMA; the scarlet wave).

Related: Cardano defies Peter Brandt’s 90% crash warning, ADA price doubles to new high

ADA’s price now sits atop 114% month-to-date and 1,511% year-to-date profits. At the same time, an oversold RSI pictures an interim profit-taking scenario. So if the Q1/2021 fractal repeats, ADA’s next line of support comes to be near its 50-day EMA at $1.73, almost 40% below the current prices of $2.83. 

But a correction won’t necessarily exhaust Cardano’s long-term bullish outlook. Given the potential success of its Alonzo upgrade, the project could end up attracting more speculative upside bids for its ADA token. As a result, the ADA/USD exchange rate expects to remain in price discovery mode.

Source: https://cointelegraph.com/news/cardano-price-eyes-3-but-ada-chart-fractal-hints-at-a-potential-40-correction

AD

Proposals Catalyst F14 - Cast your vote, search "Otavio" in the Voting App.

If you are you using your ADA to vote in Cardano’s Project Catalyst don’t forget to voice your vote. We would be excited if you can see, comment, share and vote for us. Tip: To find them its easiest to search for "Otavio"Vote for Us


Read Original Article on Cardano Feed

ORIGINAL SOURCE

https://cointelegraph.com/news/cardano-p...

Disclaimer: Cardano Feed is a Decentralized News Aggregator that enables journalists, influencers, editors, publishers, websites and community members to share news about the Cardano Ecosystem. User must always do their own research and none of those articles are financial advices. The content is for informational purposes only and does not necessarily reflect our opinion.


More from Cardano Feed

See more
BlockDAG Hits $410M+ as BWT Alpine Formula 1® Turbocharges the First Billion-Fan Blockchain: Leaving Shiba Inu & Polkadot Behind
Cardano Feed
BlockDAG Hits $410M+ as BWT Alpine Formula 1® Turbocharges the First Billion-Fan Blockchain: Leaving Shiba Inu & Polkadot Behind

today at 12:34 PM

·

38 views

Related News

See more
Voting for Us - Catalyst Fund 14

Featured News

See more



    DEFAULTENGLISH (EN)SPANISH (ES)RUSSIAN (RU)GERMAN (DE)ITALIAN (IT)POLISH (PL)HUNGARIAN (HU)JAPANESE (JA)THAI (TH)ARABIC (AR)VIETNAMESE (VI)PERSIAN (FA)GREEK (EL)INDONESIAN (ID)ROMANIAN (RO)KOREAN (KO)FRENCH (FR)CZECH (CS)PORTUGUESE (PT)TURKISH (TR)