Cardano’s Struggles: ADA Plummets by 50%, Despite SEC Clarity
Cardano’s Struggles: ADA Plummets by 50%, Despite SEC Clarity Cardano (ADA), a significant force in the cryptocurrency landscape, has recently faced a steep decline, with its price plunging from a March high...
Cardano’s Struggles: ADA Plummets by 50%, Despite SEC Clarity
Cardano (ADA), a significant force in the cryptocurrency landscape, has recently faced a steep decline, with its price plunging from a March high of $0.81 to $0.385—a sharp 50% drop. Despite a favorable ruling from the U.S. Securities and Exchange Commission (SEC), which clarified that ADA is not classified as a security, the cryptocurrency continues to be weighed down by intense selling pressure.
This downturn has sparked concerns among traders and analysts about the near-term outlook for Cardano.
A Tough Journey for Cardano
Over the past four months, Cardano has seen a dramatic downturn, losing half of its value since its March peak. Following that, the price further tumbled by an additional 60% before finding some stability in mid-July. This substantial decline underscores the persistent negative sentiment that has gripped the market.
Persistent Selling Pressure
Although ADA has managed a slight recovery recently, its price remains far below previous highs. On major exchanges like Binance and OKX, negative funding rates have been on the rise, signaling that bearish sentiment remains dominant. This continued selling pressure suggests that the token may face further declines.
On a brighter note, the SEC’s confirmation that ADA is not a security provides some regulatory clarity, offering a glimmer of hope amid these challenges.
Technical Analysis Paints a Grim Picture
From a technical standpoint, ADA’s outlook remains concerning. The token recently dipped by 4.6% to $0.385, with the potential for further drops if market conditions fail to improve. The price chart reveals a pattern of lower highs and lows, with ADA trading beneath both its 50-day and 200-day exponential moving averages (EMA).
The key support level to watch is around $0.30. Should bearish momentum persist, ADA could potentially revisit its yearly low of $0.3165.
Investor Considerations
Despite the prevailing bearish trend, some analysts see a glimmer of potential for a rebound. A report from Santiment notes a recent surge in negative funding rates, which can sometimes indicate an oversold market condition.
Historically, such scenarios have led to sharp price recoveries as sellers are forced to cover their positions at higher prices. However, this strategy comes with risks, as prices could continue to slide if the market perceives ADA as still being oversold.
Looking Ahead: The Chang Hard Fork
As Cardano looks to the future, the upcoming Chang hard fork could be a pivotal moment for the platform. This upgrade, aimed at enhancing the platform’s smart contract capabilities, could be instrumental in shaping ADA’s future performance. If successful, it may help shift market sentiment and support a potential recovery for the cryptocurrency.
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