Cardano recently underwent a Chang upgrade on its Layer-1 blockchain, introducing several key changes to the network. This upgrade included enhancements such as on-chain voting, Delegate Representatives, improved smart contract capabilities, and a new governance structure with cost model improvements.
Despite the anticipated Chang upgrade, the price of Cardano (ADA) experienced a 2.7% drop, trading at $0.3335. The market cap of ADA stood at $11.75 billion, with a daily trading volume of approximately $307.4 million. This decrease in price was accompanied by liquidations totaling $731.46K in the past 24 hours, with a majority of the liquidated positions being long, indicating significant selling pressure.
Technical indicators suggest that bears are currently in control of the market, with ADA trading near the lower boundary of its Bollinger Bands. The Moving Average Convergence Divergence (MACD) line is below the signal line, indicating strong selling pressure and a continuation of the downward trend. The Relative Strength Index (RSI) is below the neutral threshold of 50, further confirming selling momentum.
The Aroon indicator points to a predominantly bearish trend, with the Aroon Down at 100% and the Aroon Up at 35.71%. This indicates strong downward momentum and weak upward movements in the market. However, analyst Crypto Yapper notes that Cardano is currently following a multi-month Falling Broadening Wedge pattern, characterized by increasing volatility over time.
Despite the current downward trend, if ADA is able to break above the upper trendline of the Falling Broadening Wedge pattern, it could result in a sharp reversal and potentially drive the price of Cardano higher in the near future.
Cardano’s recent price drop following the Chang upgrade highlights the volatility of the cryptocurrency market. While technical indicators suggest selling pressure and a bearish trend, the potential for a trend reversal exists if ADA can break above key resistance levels. Investors in Cardano should monitor the market closely to capitalize on potential price movements in the future.