Despite its popularity and technical advancements, Cardano (ADA) has not managed to escape the red tide affecting the crypto markets as a whole at the end of the first week of July.
The token, in fact, also defied technical analysis (TA) with its most recent fall as at the start of the month, ADA’s decline appeared at an end as it formed a falling wedge breakout pattern, leading to expectations that Cardano will rally as much as 70% in the near future.
Indeed, after an exceptionally brief rally that sent the cryptocurrency near $0.42 on July 3, ADA entered a steep decline, falling to July 5 lows at $0.3211. Still, despite falling below its nearest support zone, close to $0.35, Cardano managed to evade a free fall by remaining above the second support and has, by press time, recovered to $0.34459.
ADA 7-day price chart. Source: Finbold
Nonetheless, the token remains in a precarious state given a fairly strong downtrend present across the crypto markets that saw multiple other coins and tokens fall significantly in recent days.
Is Cardano set for a rally or a greater fall?
The bearish sentiment is further reinforced by Cardano’s overall performance in recent weeks. In fact, the token had only 12 green days out of the last 30 and is trading well below its 200-day simple moving average (MA) of $ 0.536241.
Additionally, unlike other major cryptocurrencies such as Bitcoin (BTC), which, while failing to stay particularly at their March highs, nonetheless evaded major drops, ADA only briefly stayed near the $0.77 yearly highs and found itself fairly reliably below $0.50 by mid-April.
Nonetheless, as is frequently the case with Cardano, a more bullish case could be made using its technical advancements and generally positive statistics. Indeed, in just the last week, the network released both a new node and a new lace version while the number of smart contracts on the Plutus network crossed above 62,000.
Cardano weekly development report. Source: @CardanoFeed
Finally, even should the more bullish scenario unfold, Cardano is relatively unlikely to reliably rally above $0.40 in the near future, given that it would have to overcome its nearest resistance level near $0.39. Should it do that, however, it may reclaim prices above $0.50, particularly if the broader trends in the crypto markets take a euphoric turn.
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