Cardano (ADA) was one of the few cryptocurrencies that was not badly affected by the price declines in early June. Despite the massive drop in Bitcoin price, ADA held the support levels at $ 1.45 and $ 1.3 as it chose to move sideways on the charts instead. Unfortunately, the fifth-placed Alt couldn’t hold together when the price of Bitcoin fell below the 30,000 mark and ADA lost 25% of its value from July 7th to July 20th.
It is a well known trend for the larger crypto market to follow Bitcoin, but there have been exceptions in the past and one such exception has been Cardano. This time around, however, ADA is more or less viewed as a mirror of the Bitcoin price. In fact, Cardano retested the $ 1 long-term buy range for the sixth time this year.
While Cardano saw a rapid rebound at one point, rising 13% in just two days, the decline in old to a level of $ 1 was a sign that there might still be scope for a decline. In hindsight, it was also noteworthy that ADA was trading near $ 0.80 in mid-February. However, a closer look at the one-day Alt-Chart revealed the recovery from the oversold zone on July 21st.
Another close above the 200-day SMA would signal a better rebound for ADA.
Here, it’s worth noting that ADA’s price had some notable rallies this year before the Cardano hard forks took place. But will that be the case before the Alonzo Hard Fork is ready in August? Analyst Dan Gambardello recently outlined Cardano’s recovery plan, pointing out that the ultimate near-term goal for Cardano is to “get back above this $ 1.37 area on a weekly chart and green above the 20-week average close”.
He also pointed to the meeting of a falling wedge and a descending triangle pattern on Cardano’s daily chart. He recorded the breakout target in the $ 2 range and said:
“If Cardano is to break out, the breakout target for the descending triangle will be closer to the $ 2.30 area, but either way there are two bullish targets for the upward sloping wedge and the descending triangle. We have been tracking the upper trend line around $ 1.26, Cardano could test this upper trend line very soon. “
Additionally, the analyst emphasized the rallies in ADA price before each hard fork, saying it was inevitable this time too. The green areas in the graph below highlight the price rallies in ADA ahead of the hard forks of Mary and Shelley. Hence, another possible rally in the next two months, propelled by the Alonzo hard fork, would not be a surprise.
Does that mean Cardano is preparing for a rally?
Well, while it may seem like Cardano is expecting some solid profits over the medium term, some metrics show a different side of the story. On the development side, for example, activity is still low compared to June levels. In addition, ADA has seen a downtrend in development activities with lower peaks.
In addition, the trading volume and the share of whales in the total stablecoin supply were still low at more than USD 5 million. The percentage of total stablecoin supply has seen a downward trend regardless of the price surge that comes with BTC’s own increase. Likewise, the weighted social sentiment on Twitter experienced some surprising ups and downs in just one day.
In fact, at the time of writing, the indicator was at the end of a major slump.
All in all, on Cardano’s medium to short term price action, some good rallies can be seen as the Alt breaks out of its key resistance levels and converts them into support.