Cardano (ADA), the popular Proof-of-Stake (PoS) blockchain platform, has witnessed a significant price drop following the US Securities and Exchange Commission’s (SEC) approval of Ethereum ETFs on May 23rd. This approval has triggered a capital flight from ADA and other altcoins towards Ethereum (ETH) and its ecosystem.
Shifting Tides in the Crypto Market
The allure of readily available Ethereum exposure through ETFs has proven irresistible to investors. This newfound interest in ETH has resulted in a 13.64% decline in ADA’s price over the past week, plummeting from a high of $0.51 to a low of $0.46. Conversely, Ethereum has continued its bullish run, surging past the $3,700 mark after recording a 25% weekly gain.
A similar trend is plaguing Solana (SOL), another prominent PoS network. Investors seem to be prioritizing Ethereum and its associated assets, like PEPE, which has experienced two consecutive all-time highs and secured a spot within the top 20 cryptocurrencies by market capitalization.
The success of Bitcoin ETFs, which garnered over $58 billion in BTC holdings within five months of launch, paints a concerning picture for ADA and other rival PoS networks. As billions flow into Ethereum ETFs in the coming weeks, ADA’s price, along with other competing altcoins, might struggle to break free from their current downtrend.
Also Read: Ether ETFs: Boon or Bane? Centralization Concerns Behind the 80% Ethereum Price Rally
Cardano Bulls Step Up to the Plate
Despite the recent price slump, there are signs of resilience within the Cardano community. On-chain data suggests that “bulls” (investors who believe the price will rise) have stepped in to buy the dip, preventing ADA from falling below the crucial $0.45 support level.
Data from IntoTheBlock’s Order Books chart reveals a buying frenzy, with bulls accumulating 225 million ADA at an average price of $0.46. This stands in stark contrast to the 207 million ADA listed for sale by bears, indicating a potential shift in market sentiment.
Cardano ‘s Price Forecast Consolidation or Correction?
The current dominance of buy orders suggests that ADA’s price will likely hold firm above $0.45 in the immediate future. However, if the buy wall crumbles, a drop towards the next psychological support level of $0.40 could be imminent.
While another double-digit decline seems unlikely given the overall bullish sentiment in the crypto market, ADA’s price is likely to consolidate within the $0.45 to $0.48 range in the coming days. The success of Ethereum ETFs and investor preference for ETH will be key factors influencing Cardano’s price trajectory in the near future.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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