Topic: Cardano price eyes $3, but ADA chart fractal hints at a potential 40%
Cardano price eyes $3, but ADA chart fractal hints at a potential 40% correction
Cardano blockchain‘s native asset, ADA, reached a new record high on Monday as investors pinned hopes on an upcoming smart contracts feature that expects to boost the cryptocurrency’s adoption.To get more news about NEO, you can visit wikibit.com official website.
The ADA/USD exchange rate topped out at $2.899 around 9:00 am UTC, raising anticipations that it would easily close above $3 in the coming sessions.
Many analysts, including pseudonymous chartist PostyXBT, noted that the Cardano token had entered a “price discovery mode.” Meanwhile, David Gokhshtein hinted that ADA/USD might continue its bull run until Sep. 12, the day Cardano is going to integrate a smart contracts feature to its blockchain via the “Alonzo” upgrade.
In detail, the Alonzo upgrade introduces a native smart contracts development language called Plutus to the Cardano ecosystem. Plutus is already available for testing and brings functional programming to smart contract creation to everyday users.
As a result, ADA bulls anticipate the tokens adoption to boom in the sessions ahead as Cardano attracts decentralized application developers — operating in the emerging decentralized finance and nonfungible token sectors — to its smart contracts ecosystem.
But Cardanos technical indicators predict a short-term shock, something that might have the ADA/USD corrected lower by as much as 40% despite maintaining its long-term bullish outlook.
The Cardano tokens daily relative strength index (RSI) has ventured deeper into overbought territory, at around 83. Traders consider an RSI reading above 70 as overvalued. As a result, it prompts them to sell the asset to secure maximum profits.
For instance, a run-up in ADA/USD rates in the first quarter of 2021 pushed its RSI reading above 90. Later, the pair started consolidating sideways while maintaining support near its 50-day exponential moving average (50-day EMA; the scarlet wave).
Related: Cardano defies Peter Brandts 90% crash warning, ADA price doubles to new high
ADA‘s price now sits atop 114% month-to-date and 1,511% year-to-date profits. At the same time, an oversold RSI pictures an interim profit-taking scenario. So if the Q1/2021 fractal repeats, ADA’s next line of support comes to be near its 50-day EMA at $1.73, almost 40% below the current prices of $2.83.
But a correction won‘t necessarily exhaust Cardano’s long-term bullish outlook. Given the potential success of its Alonzo upgrade, the project could end up attracting more speculative upside bids for its ADA token. As a result, the ADA/USD exchange rate expects to remain in price discovery mode.
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