Weakness in Cardano (ADA) Continues: Can it Take Back Pivot Point?
Aiswarya Gopan • 2 min read
Cardano (ADA) extends its bearish trading into Tuesday, still exhibiting signs of weakness from the previous session despite a successful hard fork at the beginning of the week that enabled smart contract functionalities on its blockchain network. At the time of writing, ADA/USD is trading around $2.40.
One of the biggest factors weighing on Cardano’s price at the moment is the mood in the overall crypto market which is facing uncertainties over the possibility of increased regulatory scrutiny, especially in the US. Recently, the SEC went after leading crypto exchange Coinbase and is now going after Chinese billionaire Guo Wengui’s companies that raised almost $500 million in ICOs and IPOs. The SEC chairman has also hinted previously that the agency could go after DeFi after cryptocurrencies, which may dent the optimism about Cardano’s network being able to support dApps after the Alonzo upgrade.
Cardano’s ADA could also be sliding lower as a result of some sell-offs by investors looking to take profit after the major upgrade to its network. Following the release of the much awaited smart contracts capabilities and other key features, there was a high level of intraday sell-off taking place through the previous session and could be weakening investor interest in the third largest crypto by market cap at the moment as well.
Promising Fundamentals Offer Support
However, on the fundamentals front, there are several developments that could lend support to ADA in the near-term. After the Alonzo hard fork, KICK.IO – a project accelerator and fundraising platform developed for Cardano, has its IEO scheduled for September 15. Once it launches, it could play an important role in attracting more developers to build applications on Cardano’s blockchain, driving up its use and helping ADA climb higher.
Meanwhile, another initiative by decentralized micro-lending and borrowing blockchain platform Revuto can also spur innovation among projects in Cardano’s ecosystem. The company has announced the launch of R Fund – a $2 million investment fund dedicated to supporting Cardano-based startups to help them launch successful ICOs for their projects. In addition, decentralized lending protocol ADALend.finance sold out all its tokens for its seed round within a span of one hour, revealing the rising interest among investors in projects on Cardano’s blockchain.
Key Levels to Watch
Technical analysis of the H4 price chart of ADA/USD reveals a strong bearish bias among moving averages as well as leading technical indicators MACD and momentum. Cardano’s price is sitting under the pivot point at $2.50 but appears to be holding up well above the $2.40 level for now.
In case of further bearish pressure, however, this level could break down and ADA could head lower to test the immediate support at $2.09. On the other hand, a reversal in market sentiment can boost its price higher beyond the pivot point and take it back towards the $3 mark.