Cardano price has crawled back in the past few days as concerns about the crypto industry remains. ADA was trading at $0.3160 on Wednesday, which was slightly above this week’s low of $0.2970. It has plunged by more than 80% from its all-time high, leading to over $80 billion in losses for investors. And the worse is possibly yet to come.
Cardano price has been in a strong bearish trend in 2022. After peaking at $3, the coin has slipped to $0.29 because of three main reasons. First, the collapse has been a close correlation with the broad crypto industry. Most coins have crashed, with Bitcoin moving from $67,000 to about $16,000. The total market cap of all coins has slumped to about $800 billion from its all-time high of over $3 trillion.
Second, ADA price has collapsed as concerns about its ecosystem remain. More than a year into the launch of its smart contracts, Cardano has underperformed its blockchain peers like Tron and Cronos. There are only a handful of DeFi apps and none has grown to the scale of Uniswap or PancakeSwap. The only industry where Cardano is doing well is in NFTs, which seems like a dying industry.
Third, Cardano price has crashed because of the challenges with Terra and FTX. Terra’s ecosystem collapsed in May while FTX went out of business this month. Genesis, another leading company, has also suspended operations. As a result, most crypto investors are fearful about what will happen next. The crypto fear and greed index has plunged to below 20.
Therefore, it is relatively risky to buy the Cardano dip since the coin is in a strong downward trend and risks in the industry are real. As such, we can’t rule out a situation where the coin continues falling.
The 4H renko chart below shows that the ADA price has been in a strong bearish trend in the past few months. It has managed to move below the important support level at $0.3341, which was its lower peak on October 23rd. Cardano price remains below all moving averages and the momentum is significantly bearish.
Therefore, the coin will likely continue falling as sellers target the next key support level at $0.25. A move above the resistance point at $0.33 will invalidate the bearish view.
This post was last modified on Nov 23, 2022, 04:46 GMT 04:46