ADA LAGGING BEHIND BTC & OTHER LARGE CAPS
This week we have seen Bitcoin (BTC/USD) move 16.2% to the upside and we have also watched many large-cap coins such as XRP (XRP/USD), Polkadot (DOT/USD) and Doge (DOGE/USD), amongst other ones, make significant gains as well (+13.1%; +11.2%; +10.3% respectively), while the price of ETH (ETH/USD) increased by solid 4.2%. One thing that we have failed to see in recent weeks is any sort of volatility from the Cardano’s native token ADA (ADA/USD). It literally feels like its price is on holiday with the CEO of IOHK Charles Hoskinson, in some place that’s very hot, excessively humid and generally hostile towards any activities that require mental or physical effort. Maybe Thailand, although he might have mentioned his own ranch- it doesn’t matter as long as the founder of the blockchain gets back soon and in good form.
Two weeks after The Cardano Summit, Hoskinson’s absence is coming to an end and from now his near-future attention will shift to visiting multiple African countries in order to meet potential new business clients and partners that could possibly be next in line to get involved with the 3rd largest blockchain ($71.5B in market cap compared to Bitcoin’s $1038B) and one that has already seen some impressive growth of its ecosystem this year and especially since the smart contracts were finally rolled out. As of today, a month after the Alonzo upgrade, Cardano is able to boast partnerships with an imposing number of projects in a vast variety of areas including: DeFi, Payments, IDOs, NFTs, AMM, Stablecoins, Oracles, Insurance – the list goes on and on.
Yet, the founder Charles Hoskinson still remains the biggest asset to Cardano in the minds of many investors and hopefully his comeback should help the native token ADA to continue increasing its dollar value during the last quarter of this year, which could conceivably be the last part of the on-going bull run for the cryptocurrency industry. Let’s bear in mind that he has got some enormous following in social media (725k Twitter followers alone and a popular You Tube channel), very important aspect in terms of the network effect in the cryptoworld.
ADA’S PRICE ACTION AND THE MOST LIKELY SCENARIO
In my last two weekly articles on ADA (ADA/USD) my Technical Analysis section was mainly focused on that descending triangle pattern and I was predicting a break-out from this formation before 9th October. We did end getting our breakthrough movement to the upside precisely three days before the deadline – on 6th Octthe price spiked by 12% up to an intraday high of $2.37. The volume on the move was the highest in two weeks but still kind of underwhelming and no explosive price action followed. At least so far. In fact, ADA is trading almost exactly where it was one week ago and also a fortnight ago, when the Summit was coming to an end on Sunday 26th September.
But what’s changed for the better is that as of today, Cardano’s native token is comfortably positioned above its vital moving averages (MA 100 – thick pink line and MA 50 – thick blue line). Both are offering us solid support for the time being as they have been crucial levels to watch for months, especially the 50 MA which turned out to be a hard nut to crack on multiple occasions. Below these moving averages there is a seemingly dependable area of potential support, from $2.15 (VPVR’s red horizontal line) all the way down to the $2 mark (bottom of the descending triangle ADA just left behindas well as a meaningful psychological barrier). All of this above is bullish in itself, but let’s check on some other indicators for more info before we turn the bull mode on, shall we?
Let’s pull up the daily chart and immediately we can observe that RSI has been showing bullish divergence and it’s yet to start playing out – that’s another affirmative sign for those that are considering a trade to the upside or perhaps making a spot purchase in order to add to their portfolio. Also, the MACD had a bullish cross on 2nd Oct and that has historically been nothing but good news. A quick glance at both the ADA/BTC and ADA/ETH charts tells us that Cardano’s token has been losing ground in relation to both the 1st and 2nd largest crypto for over two weeks now, although the rate of the decrease has slowed down considerably in recent days which might signify a looming reversal of the downtrend in these pairs.
To sum it all up, in my mind ADA looks primed for a highly anticipated period of an uptrend movement finally. If the coin gets some positive mentions in various crypto news outlets originating from Hoskinson’s business tour of African countries that is apparently scheduled to start in the next couple of days, that should be enough of a catalyst for the price of this crypto asset to shoot up. Obviously the longer Bitcoin (BTC/USD) stays above the recently conquered critical level of $53k, the greater the likelihood of this scenario playing out.
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