Cardano price prediction: cup and handle pattern points to a breakout
- Cardano has been in a tight range recently and is down by more than 45% off its all-time high.
- The coin has formed a cup and handle pattern on the weekly chart.
- Cardano could soon bounce back since C&H is usually a sign of a bullish continuation.
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Cardano price is under pressure as demand in cryptocurrencies demand for cryptocurrencies ease. It is trading at $1.3030, which is about 46% below the highest level this year. The decline has brought its total market capitalization to more than $41 billion making it the 5th biggest cryptocurrency in the world.
Cardano rally fades
Cardano (ADA/USD) is a blockchain project developed by Charles Hoskinson, who was a co-founder of Ethereum in 2015. The network helps developers build decentralised projects that solve real-world problems. For example, universities can distribute their certificates better while companies can use the network to solve the challenges associated with counterfeits.
Cardano’s roadmap is made up of five key steps. Byron was the foundation of the project, which enabled people to buy and sell ADA. It was then followed by Shelley, which was the decentralization stage and Goguen. Goguen is important since it enables smart contracts, which are useful in building decentralized applications. The next two stages are Basho and Voltaire. Basho is all about scaling while Voltaire is about maintenance.
Cardano price was in a strong upward momentum early this year as investors embraced the platform. This embrace was mostly because of Charles Hoskinson’s reputation and belief in the platform. At its peak, ADA had a market capitalisation of more than $60 billion.
Recently, though, the price has crashed as demand fades. This weakness is mostly because of regulatory and monetary policy fears. With the American economy rebounding, there are fears that the Fed will embrace a relatively hawkish monetary policy. In most cases, risky assets like cryptocurrencies and growth stocks tend to underperform when the monetary policy is tight.
Cardano price has also underperformed because of the ongoing crackdown in China. The country has directed all banks and financial companies to investigate accounts dealing with the currencies.
Cardano price prediction
Turning to the weekly chart, we see that the ADA price has struggled recently. It is trading at $1.3030, which is a notable price since it was the highest level on July 1st 2018. The coin has formed what looks like a cup and handle pattern.
This consolidation seems to be part of this handle. It has also moved above the 25-day and 50-day exponential moving averages (EMA). Therefore, there is a possibility that the price will soon rebound since a cup and handle is usually a sign of a bullish continuation.