Cardano Price Prediction: Double Top Points to a Big Drop
- Cardano price has dropped sharply in the past few days.
- It has formed a double-top pattern on the four-hour chart.
- The coin will likely continue falling as sellers target the key support at $0.4137.
Cardano price remained under pressure as investors waited for the upcoming Federal Reserve interest rate decision. ADA dropped to a low of $0.4660, which was about 14.86% below the highest level this month, bringing its total market cap to about $15.7 billion.
Vasil upgrade ahead
Cardano price has been in a strong bearish trend as investors react to the ongoing cryptocurrency sell-off. The decline happened as investors worried about the upcoming interest rate decision by the Federal Reserve.
The Fed started its two-day meeting on Tuesday and is expected to publish its decision on Wednesday. Analysts expect that the bank will hike interest rates by another 0.75% for the second straight month.
Historically, cryptocurrencies tend to underperform in a period of high interest rates. This also explains why Bitcoin and other coins have dropped sharply this year.
Cardano price also declined as investors downplayed the impact of the upcoming Vasil hard fork that is scheduled for the next few weeks.
According to IOHK, the upgrade will bring significant performance and capability enhancements to Cardano. Some of the top features that will be in the upgrade are diffusion pipelining and upgrades to Plutus. Plutus is Cardano's smart contract language.
As a result, Cardano will introduce other features like reference inputs, which enables data sharing on-chain. It also introduced inline datums, which will enable developers to create scripts and attach datums directly to outputs instead of using their hashes.
Learn more about how to buy Cardano.
Further, Vasil will introduce reference scripts, which will allow developers to reference a script without including it in each transaction.
Cardano price rallied earlier this month as investors waited for this upgrade. Now, the decline is likely because of investors who are selling the news.
Cardano price prediction
The four-hour chart shows that the ADA price formed a double-top pattern. In price action analysis, a double-top is usually a bearish sign. The coin dropped below the chin of the double-top pattern at $0.4751.
Cardano has moved below the 25-day and 50-day exponential moving averages while the Relative Strength Index (RSI) has moved slightly above the oversold level.
ADA is now aiming to retest the next key resistance at $0.4752. Therefore, there is a likelihood that the coin will resume the bearish trend and retest the key support at $0.4246.