Cardano price has crashed into a bear market this month and is now at a significant risk of further downside as technicals and fundamentals align. The ADA token was trading at $0.6680 on Thursday, down sharply from the August high of $1.0205.
Technical Analysis Suggests that Cardano Price May Crash Further
The daily timeframe chart shows that the ADA price has been in a strong downward trend in the past few months. It has tumbled from a high of $1.0205 to $0.6685.
Cardano price has plunged below the strong pivot, the reverse point of the Murrey Math Lines at $0.6836. It has also tumbled below the lower side of the rising wedge pattern, which is made up of two ascending and converging trendlines.
The coin also formed a head-and-shoulders pattern and is about to form a death cross. A death cross happens when the 50-day and 200-day Exponential Moving Averages (EMA) flip each other.
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Therefore, the most likely scenario is where it continues falling to the extreme overshoot level at $0.4883. This is a notable price that coincides with the lowest level in April and June where it formed a double-bottom pattern.
Weak Fundamentals Put ADA Price at Risk
In addition to weak technicals, Cardano has some of the worst fundamentals among large coins. Cardano is widely seen as a ghost chain despite its $24 billion valuation.
Unlike Solana, BNB Chain, and Tron, there is normally little activity going on in its ecosystem. Cardano has a negligible market share in the NFT industry, which is dominated by Ethereum and Solana.
Additionally, its total value locked (TVL) has plunged to $285 million because mainstream projects like Aave and Uniswap have ignored it. Cardano boasts of just $36 million in stablecoin supply, a negligible amount for an industry with over $306 billion in assets.
Fund managers have also ignored Cardano. While 9 companies have applied for spot XRP and Solana ETFs, only Grayscale has applied for a spot ADA ETF. This is a sign that these companies see an issue with Cardano.
Most importantly, Cardano has a long history of not living up to its pledges. For example, the company launched a plan to bring Ethiopia’s education system on-chain in 2021 and later abandoned it.
Charles Hoskinson has talked about Bitcoin integration for years. To date, no such integration has happened. Nothing much has been said about its partnership with BitcoinOS, which was announced last year.
Also, Hoskinson’s ambitions for a Chainlink integration have failed as the biggest oracle network has ignored it. This is notable as Chainlink provides oracles to newer chains.
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