Cardano price remained under pressure on Friday as sentiment in the crypto market waned. ADA was trading at $0.8150, down by about 20% below the highest point this year. So, is Cardano a good buy ahead of the Hydra upgrade?
Cardano Launches Hydra Node 1.0
ADA price has been under pressure in the past few days as the recent crypto market rally faded. Its performance waned even as the developers launched the Hydra node 1.0, which is part of one of its biggest upgrades ever.
The new upgrade introduced several features, including partial deposits, API server fixes, and allowing recovering of deposits. This launch was part of the ongoing development towards the full Hydra upgrade that aims to improve Cardano’s performance substantially.
Once upgraded, Cardano will be able to offer millions of transactions per second, making it faster than other chains. It will also keep gas fees near zero, support developer velocity, and reduce operational friction.
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Still, the main challenge for Cardano is that it is a ghost chain with weak developer and user interest. It is unclear whether a swanky upgrade will change this. A good example of this is in the decentralized finance (DeFi) industry, where Cardano only has 59 apps, most of which have no activity.
Cardano has a total value locked of $332 million and just $38 million in stablecoin supply. Its DEX activity has largely dried up, with the 24-hour volume being less than $2 million. In contrast, the recently-launched Plasma has 39 apps, $8.9 billion in TVL, and $5.4 billion in stablecoins.
It is also unclear whether Midnight, Cardano’s sidechain, will be successful, as it needs an active ecosystem to scale.
Cardano Price Technical Analysis
The daily timeframe chart shows that the ADA price peaked at $1.0205 in August this year and then started moving downwards. It has now moved slightly below the 50-day Exponential Moving Average (EMA).
Cardano has also formed a rising wedge pattern, which is made up of two ascending and converging trendlines. A wedge is one of the most common bearish chart patterns in technical analysis.
The coin has also formed a bearish divergence pattern, which occurs when the Relative Strength Index (RSI) moves downwards while an asset is in an uptrend.
Cardano has also formed a head-and-shoulders pattern. Therefore, the coin will likely have a bearish breakout in the coming weeks. If this happens, the next key level to watch will be at $0.6850, its lowest point on August 2.
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