Cardano price has plunged this year, falling from a high of $1.3257 in December to a low of $0.5133, representing a 67% decline. The ADA token was trading at $0.5876 on Wednesday, valuing it at over $20 billion. This article explores whether it is a good buy ahead of the Glacier airdrop.
Cardano Price Analysis Ahead of the Glacier Airdrop
One of the biggest catalysts for the Cardano price this year is the upcoming Glacier airdrop, scheduled to happen within the next few months. This airdrop is based on Midnight, a privacy-focused sidechain to Cardano.
Midnight’s main focus is to ensure the privacy of Cardano by focusing on a technology known as zero-knowledge proofs. ZK proofs are cryptographic techniques that allow users to verify information without revealing their sensitive details.
Midnight will feature a dual-token system: NIGHT and DUST. NIGHT will be a utility token minted on Cardano for governance purposes. It will have 24 billion tokens and be locked in Cardano’s smart contracts.
DUST, on the other hand, will be used for transaction fees and network activities in Midnight. Therefore, the Glacier airdrop will distribute to 37 million wallets across eight layer-1 chains, including Cardano, Bitcoin, Ethereum, Solana, XRP, BNB, Avalanche, and BAT.
Users will be able to claim the NIGHT token if they had these tokens by June 9. They will also need to have supported Cardano wallets, such as Lace, Tokeo, Gero, Begin, and Yoroi.
While details have not been released, 1 ADA token will receive about 0.816 NIGHT tokens. This means that a user with 1,250 ADA tokens will receive 1,020 NIGHT tokens.
The value of these tokens will depend on the launch price and their holdings. According to TapTools, a user with 100 million ADA tokens will receive between 20 million and 40 million NIGHT tokens.
If the price starts at $0.01, their holdings will be worth between $200,000 and $400,000. Still, like other airdrops, estimating the value of NIGHT ahead of its launch is challenging, and there is a risk that its price will plummet as recipients sell their token shares.
On the positive side for Cardano, there is a likelihood that the coin will bounce back ahead of the Glacier airdrop. However, this airdrop will be short-lived as investors will sell the news when it happens.
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Cardano Price Technical Analysis
The three-day chart shows that the Cardano price has been in a strong downtrend in the past few months. It has plunged from a high of $1.3257 in November to a low of $0.5133.
ADA price formed a double-bottom pattern at $0.5133, with its neckline at $0.8665, its highest level reached on May 10. This is one of the most popular bullish reversal patterns.
Therefore, the coin’s outlook is bullish as long as it remains above the support at $0.5133. If this happens, the potential target is $0.8665, up by 48% above the current level.
A drop below the double bottom at $0.5133 will invalidate the bullish view and point to further downside, potentially to the 78.6% retracement at $0.4730.
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