Cardoon (ADA) will undergo a major network update called “Vasilon September 22, potentially making its blockchain more scalable and cheaper. Nonetheless, the news failed to spark any decisive bullish momentum in the ADA market.
Macro Factors Weigh on ADA’s Bullish Best-Scenario
In detail, the price of ADA has risen around 3.5% to $0.51 since Vasil’s launch announcement, including a rally of around 14% followed by its near-perfect wipeout. In other words, traders initially bought the Vasil hype but quickly exited the markets, as the price action below illustrates.
Cardano founder Charles Hoskinson blame “macro factors” for ADA’s underperformance despite Vasil’s euphoria, noting that crypto markets, as a whole, are “out of touch with reality.” He added:
“Cardano has never been stronger and frankly, many other projects are also strong in the industry, but you don’t see that reflected – just a sea of red.”
Statements emerged as riskier assets primed for another deep fall in the days leading up to the Federal Free Market Committee(FOMC) September 20-21.
Markets to believe that Federal Reserve officials will vote to raise benchmark interest rates an additional 0.75% on September 21. Overall, the US central bank plans to lower the rate from 3.75% to 4% by the end of 2022.
A high-rate environment could harm Cardano and other prime crypto assets, given that it will likely increase the attractiveness of cash instruments among investors.
Is a “mini” Cardano rally planned?
From a technical standpoint, Cardano looks set to undergo a mini rally in the days leading up to the Vasil hard fork.
On the four-hour chart, ADA price is testing a confluence of support for a potential rebound move. This confluence is made up of a multi-week ascending trendline and a support bar highlighted in the chart below.
Suppose ADA rebounds from confluence. Then the immediate upside target for ADA is around $0.50. This level is a meeting point of two resistance levels: a “multi-week descending trendline” and an “average target level” that has served as a price ceiling since mid-August.
Meanwhile, a break above $0.50 could lead ADA bulls to test $0.53 as their primary upside target, a level with a significant history as resistance. In other words, ADA could print a 15% gain ahead of Vasil’s hard fork from its September 7 price.
However, ADA looks weaker on its longer-term charts, with its three-day performance revealing the presence of a bearish continuation pattern dubbed “descending triangle.”
ADA risks falling to $0.26 if it breaks decisively below the lower trendline of its descending triangle, according to the rules of technical analysis. In other words, a price drop of nearly 40% from current prices.
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