Widely followed crypto analyst Benjamin Cowen warns that Ethereum (ETH) rival Cardano (ADA) is repeating a 2019 downward pattern.
In a new strategy session, Cowen argues that Cardano has yet to find a bottom by comparing its price action in 2023 to its market structure in the second half of 2019, when ADA kept finding new lows.
“The second half of 2019 was probably the most difficult part of the cycle [for Cardano] because it wasn’t very exciting. You just watched the altcoin market slowly bleed out.
There were certainly a lot of pumps. I mean, no shortage of pumps. We had tons. This one here [in 2019 from $0.035 to $0.050] was 41%. This one here [from $0.041 to $0.58] was also 40%. We had a lot of pumps like that and they just kind of faded.”
According to Cowen, ADA rose in 2023 similar to 2019 when the token formed double top patterns and then dipped below the bull market support band, which in technical analysis is the combination of the 20-week simple moving average (SMA) and the 21-week exponential moving average (EMA).
“And we saw the market capitulate to new lows [with ADA at $0.077], and even then it didn’t mark the low point for ADA. Because we saw it rise and then fade [to $0.017]. I know it wasn’t a popular point of view to talk about this. But so far it is no different.
We saw ADA bottom out in 2022 [at $0.315] just like in 2018 [at $0.028]. We saw it pumping in 2023, just like here in 2019. You reached two peaks here (in 2019) just like we got here (in 2023). We are moving below the bull market support band (in July 2019), just as it did (in June 2023). It went almost identically, almost identically to the previous cycle.
Cowen also monitors ADA’s performance against Bitcoin (ADA/BTC).
He highlights how ADA only bottomed out against Bitcoin in the third quarter of 2019 and remained at those lows for another six months before recovering, which he believes could play out again for ADA in the current market cycle.
“Remember that ADA/Bitcoin only reached the last cycle in the third quarter of 2019. And even then, ADA/Bitcoin really held those lows for half a year before moving back up. At this point, we haven’t even convincingly found a level at which ADA/Bitcoin holds those lows.”
ADA is trading at $0.30 at the time of writing, down 4.3% over the past 24 hours.
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Image generated: Midway through the journey