The recent decline in the price of Cardano (ADA) has raised concerns among investors as it breached the combined $0.3 support and a crucial support trendline. However, a closer analysis of the daily chart reveals a twist that could provide a glimmer of hope for the cryptocurrency’s recovery.
Technical analysis of Cardano price movement suggests that the apparent breakdown of the ascending support trendline could be a false one.
A false breakout, also known as a false breakout or bear trap, occurs when a price temporarily drops below a support level or trendline, but quickly recovers, trapping bearish traders who sold during the dip.
This deceptive move often leads to a quick reversal and upward momentum.
Cardano: False Failure or True Bearish Signal?
On the other hand, a decisive break of the overhead trendline could pave the way for a substantial 26% increase in Cardano’s price, according to recent price analysis. This would not only represent a significant price recovery, but also bring renewed optimism to traders and investors.
In providing insight into current market dynamics, it is important to recognize the broader context surrounding Cardano’s performance.
Despite the recent price turmoil, Cardano has shown remarkable growth in terms of total value locked (TVL). Crypto analytics company Messari’s last report reveals that TVL from Cardano is up nearly 200% since the start of the year.
Quarter-over-quarter (QoQ) the TVL was up 9.7%, and year-to-date (YTD) it was up a whopping 198.6%.
This rise in TVL propelled Cardano from 34th to 21st position in terms of total TVL of all blockchain networks. This remarkable achievement underscores the growing adoption and utility of Cardano’s ecosystem.
Setback due to regulatory pressure
However, the journey to this achievement has not been without its challenges. The report points out that Cardano’s TVL suffered a dip in June, caused by regulatory turbulence.
The U.S. Securities and Exchange Commission (SEC) has sued cryptocurrency exchange Coinbase for allegedly offering unregistered securities, specifically naming ADA in the lawsuit. This development led to a sell-out of ADA and resulted in liquidations on Cardano-based decentralized finance (DeFi) platforms.
ADA market cap currently at $10.4 billion in today's chart: TradingView.com
From the latest data of CoinGecko, Cardano is currently trading at $0.299138. While the cryptocurrency has seen a 3.1% rally in the last 24 hours, it has also weathered a 3.8% slump over the past seven days.
Cardano’s recent price move may appear bearish due to a seemingly significant breakdown of key supports. However, careful analysis suggests the possibility of a bogus outage, lending an ounce of optimism for a possible recovery. Amid challenges, Cardano’s impressive TVL growth reflects its resilience and adoption within the crypto ecosystem.
(The content of this site should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).
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