Cardano price has slumped in the past few months, mirroring the performance of most cryptocurrencies. ADA has plunged to $0.630, down by 52% from its highest point this year. Let’s explore whether Cardano will surge and retest the year-to-date high of $1.329.
Cardano Price Technical Analysis as Descending Channel Forms
The three-day chart indicates that the ADA price has been in a strong downtrend, pushing it into a deep bear market. It has plunged by over 52% from its highest point this year.
It has formed a descending channel, whose support and resistance levels connect the higher highs and lower lows since January. Its current price is inside this descending channel.
Cardano has remained below the 50-day and 100-day Exponential Moving Averages (EMA). It also plunged below the key support level at $0.80, the highest swing on March 13.
Most importantly, ADA price has moved below the 61.8% Fibonacci Retracement level at $0.641. This is notable since most reversals happen at this retracement point.
Therefore, the most likely scenario is where Cardano price continues its downtrend and possibly hits the psychological point at $0.50.
Odds of Cardano jumping by 110% and retesting the year-to-date high of $1.33 are limited. This probability will only increase if the coin jumps above the upper side of the descending channel, which resembles a bullish flag pattern.
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Why ADA Price Has Crashed This Year
Cardano has declined this year due to the ongoing price action among altcoins. Data show that the market capitalization of all altcoins, excluding Bitcoin, Ethereum, and stablecoins, has plummeted by over 35% from its highest point this year to the current $600 billion.
Cardano has also fallen because of some broken promises by Charles Hoskinson, its founder. For example, he hyped a potential VIP meeting earlier this year that did not generate any announcement. He also hinted at a partnership with Chainlink that has yet to materialize.
Further, there are signs that Cardano is not generating any institutional interest this year. Only Grayscale and Tuttle Capital have applied for a spot ADA ETF. Instead, about 10 firms have filed for ADA and XRP ETFs.
Cardano price has also underperformed because its ecosystem has stagnated this year. There are no meaningful Cardano meme coins; its DeFi TVL has plunged to $357 million, while its stablecoin market cap stands at $31 million. These numbers are much lower than newer chains like Sonic and Berachain.
Cardano is now pegging its hopes on Bitcoin DeFi. While this is a good idea, the reality is that it is not novel, as investors are already participating in Bitcoin DeFi through platforms like Babylon and Lombard Finance.
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