The Cardano price has staged a major comeback after it crashed to $0.99 this week. ADA is trading at $1.355, which is about 35% above the lowest level this week. The coin is still 45% below its highest level this year while its market capitalization is at $42 billion, making it the 5th biggest cryptocurrency in the world. It is sandwiched between Binance Coin and Dogecoin.
Cardano is a leading blockchain project that helps developers build decentralized apps. The platform was built by Charles Hoskinson, a co-founder of Ethereum. Its goal is to build applications that help solve key issues. For example, it can build apps that can help universities with certificates issuance. It can also help build applications to fight counterfeit.
Cardano has not been immune to the ongoing sell-off in the crypto industry. Its price has dropped by more than 45% from its all-time high. This is because of profit-taking and the ongoing risks like China crackdown, tougher regulations, and higher interest rates. Today, ADA price has rebounded as investors buy the dip after it fell to the lowest level since May. So, is this rebound sustainable?
The daily chart shows that the momentum on Cardano has waned recently. Indeed, the coin managed to move below the 100-day and 50-day moving averages. It also seems to be forming a head and shoulders pattern, which is usually a bearish signal. The neckline of this pattern is at around $1.
Therefore, in my view, I suspect that the current rebound does not have legs. There is a possibility that the price will resume the downward trend before a viable long position emerges. However, a move above $2.00 will invalidate the bearish thesis.
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