Cardano (ADA) has seen a rough year so far, slipping out of the coveted top 10 cryptocurrencies by market capitalization. However, a recent price increase hints at a potential comeback. Let’s delve into the challenges Cardano faces and the factors that could propel it back to its former glory.
Regaining The 10th Spot – A Hurdle Named Tron
Cardano’s return to the top 10 hinges on surpassing Tron (TRX) in market cap. This metric considers both price and circulating supply. While a recent uptick has boosted ADA, surpassing Tron requires a price increase.
Here’s where things get interesting. On-chain analysis using the In/Out of Money Around Price (IOMAP) indicator reveals a significant resistance level at $0.38. This level represents a large pool of addresses (over 155,800) who bought ADA tokens at that price point. These “out-of-the-money” holders might sell to break even, creating a hurdle for the price to climb further.
Overvaluation Concerns – A Case of Inflated Expectations?
Another challenge for ADA is the Network Value to Transaction (NVT) ratio. This indicator suggests the token might be overvalued compared to its current transaction volume. A high NVT ratio implies the market cap is ballooning faster than actual network usage. This could indicate an unsustainable price bubble.
Despite the roadblocks, there are glimmers of hope. The upcoming Chang hard fork, aimed at decentralizing the Cardano blockchain, could trigger a price surge. YouTube channel DiscoverCrypto speculates that this upgrade, expected by August’s end, might lead to a significant rally for ADA.
Technical Analysis Hints at a Short-Term Move
Technical indicators offer a positive short-term outlook for ADA. The asset is currently trading within a symmetrical triangle, a pattern that doesn’t inherently signal a bullish or bearish trend. However, the positive Cumulative Volume Delta (CVD) suggests more buying than selling pressure, potentially pushing the price towards $0.36.
Also Read: Cardano’s (ADA) Chang Hard Fork – Will It Fuel A 33% Surge In ZK-Scaling Dominance?
The Moving Average Convergence Divergence (MACD) indicator further bolsters this view by displaying positive momentum for ADA. In a bullish scenario, this momentum could propel the price to $0.39, potentially reclaiming the 10th spot. However, a rejection at $0.36 could see a retracement back to $0.33.
Cardano’s path back to the top 10 is paved with both challenges and opportunities. Overcoming the resistance at $0.38 and addressing the potential overvaluation concerns are crucial hurdles. However, the upcoming Chang hard fork and positive technical indicators offer reasons for optimism. Only time will tell if Cardano can navigate these factors and reclaim its lost position.
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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