Cardano price has bounced back in the past few days, moving from a low of $0.4910 to $0.5615, and a forming inverse cup-and-handle pattern points to more downside this year.
Summary
- Cardano price has formed an inverse cup-and-handle pattern on the daily chart.
- It also formed a death cross pattern and remains below the Supertrend indicator.
- The coin may crash despite Charles Hoskinson’s bet on Leios and Midnight.
Cardano (ADA), a top layer-1 network, has crashed by 45% from its highest point in September. It also remains much lower than the all-time high of $3.
ADA has underperformed other similar tokens like Solana (SOL) and Binance Coin (BNB) over time because of concerns about its ecosystem. DeFi Llama data shows that it has a negligible total value locked in its network.
Cardano has a few developers and decentralized applications on its platform. Existing apps also have a negligible market share in their industries.
Therefore, Charles Hoskinson is betting on two major developments to boost its ecosystem and ADA. One of them is the Leios upgrade, which will introduce the input, endorsement, and ranking blocks, enabling parallel processing.
Once implemented, Cardano’s throughput will jump by between 30 and 50x, making it a more friendly platform for developers.
Hoskinson is also betting on Midnight, a sidechain set to boost its ecosystem growth over time. Midnight will be a security-focused sidechain using the zero-knowledge technology. It will be a Cardano asset that will be wholly interoperable, meaning that data will be able to move between the two chains.
Midnight has already inked deals with some notable developers like Atlas, Alchemy, Ankr, Anastasia Labs, Brave, and BitGo. Hoskinson expects that the network will have a large user base and more activity, which will boost Cardano’s ecosystem.
Still, Hoskinson is known for making huge claims that rarely materialize, including a potential partnership with Chainlink and SpaceX.
Cardano price technical analysis
The daily chart shows that the ADA price has crashed from a high of $1.019 in September to a low of $0.4910 earlier this month. It has formed an inverse cup-and-handle pattern, a popular bearish continuation sign in technical analysis.
The distance between its upper and lower sides is about 50%, meaning that the token may ultimately drop to $0.25 in the longer term. This target is about 55% below the current level.
The coin has also remained below the Supertrend indicator and formed a death cross pattern. All these patterns point to more downside in the coming months.
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