Cardano price remained flat on Monday, staying within a narrow range that it has remained in over the past few days. ADA was trading at $0.5800, a few points above its June low of $0.513. Technicals paint a bleak picture, signaling more downside in the coming weeks.
Cardano Price Rare Chart Pattern Signals a Crash is Coming
The daily timeframe shows that the ADA price has formed a descending channel whose upper and lower trendlines connect the highest and lowest swings since December.
Cardano has plunged below the 100-day Arnaud Legoux Moving Average (ALMA), a sign that bears are in control. This moving average has provided substantial resistance in the past few months.
The chart also indicates that the coin has formed a bearish flag pattern, suggesting further downside. This pattern consists of a vertical line and an ascending channel resembling a flag.
Most importantly, this handle section is part of Cardano’s inverse cup-and-handle pattern. An inverse C&H pattern has strong support, in this case at $0.513, and a rounded top, with its upper side at $0.862. An inverse C&H pattern is one of the most common bearish continuation signs.
Therefore, it is likely that the Cardano price will have a bearish breakdown in the coming days. This breakdown will be confirmed if it moves below the lower side of the cup at $0.513. Such a move will likely indicate further downside, potentially reaching the 78.6% retracement level at $0.50, followed by the lower side of the channel at $ 0.30.
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Potential Cardano Developments Unlikely to Provide Catalyst
In theory, the Cardano price has numerous catalysts that may push it higher in the future. First, there is the ongoing Hydra development. Hydra is a layer-2 project seeking to accelerate Cardano’s performance. It will have low transaction fees and quicker speeds than Cardano’s Layer 1.
Second, Cardano is working on the Leios upgrade that will introduce parallel block processing. It will introduce input blocks, endorsement blocks, and ranking blocks. It will boost Cardano’s transactions per second (TPS) from the current 40 to 1,500.
Third, Cardano is also working on Midnight, a privacy-focused network that will be a sidechain to Cardano, safeguarding sensitive data using zero-knowledge proofs.
Midnight will have two tokens, DUSK, for transaction fees and network activities, and NIGHT for governance activities. These tokens will be airdropped to Cardano holders soon.
Still, while these upgrades are important, it is unlikely that they will boost Cardano’s price. That’s because, for a scaling solution to work, it needs to have an ecosystem, which Cardano has struggled to build over the past few years. Cardano has only a handful of applications and a TVL of less than $350 million, which explains why it is often called a ghost chain.
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