Cardano [ADA]: Assessing if recent sell signals might play spoilsport
Cardano has had a decent 2022, with the blockchain gaining nearly $200 million in TVL in a matter of weeks. In fact, its network value is expected to rally further when new solutions and dApps drop.
Slew of releases on the way
From stablecoins and wrapped BTCs to efficient DEXs and an increase in throughput – Cardano has a lot planned and scheduled to be released in the near future.
Agree. Cardano TVL will fly when we have
1 stable coins
2 wrapped BTC
4 hardware wallet support
5 DEXes with limited impermanent loss
6 ADA on-chain staking support (risk-free hurdle rate)
7 high throughput
All boxes will be checked in 0-6 months, most 0-3m https://t.co/TXvshgGoYD
— ADA whale (@cardano_whale) April 2, 2022
Technically too, Cardano is in a sweet spot right now. The price happens to be close to its July 2021 levels. With these many products scheduled to release soon, these are very attractive levels.
It broke down below a descending triangle to touch lows of $0.77 before recovering. At press time, it was trading below the same crucial support level which has now flipped to become a resistance level.
It will have a hard time breaking through this, but seems like broader market positivity over the past two weeks has supported it. What’s more, it hasn’t fallen too far from this supply zone. If it able to break through $1.2, things will begin to look really well in terms of price action too.
Along with that, ADA holders are also in a sweet spot since they are reasonably profitable in their exposure to the altcoin. According to data from Santiment, Network Realized Profit/Loss stood at around $146k at press time – A very healthy sign, despite the 75% corrections it saw from its ATH.
Social dominance for Cardano has also been attempting recovery from its lows over the last week and a half, suggesting greater online chatter. This is quite understandable thanks to the slew of announcements and product launches that are on the way for the coin.
Here’s a caveat, however
Not everything is working in favor of the bulls. Contrary to most views, Santiment’s adjusted price DAA divergence has been flashing sell signals over the last couple of days, with the largest one in recent times seen on 3 April itself.
This does bring about a certain fear of a short-term weakness.
By and large, things seem to be looking moderately bullish for Cardano. Alas, thanks to weakness following its massive crash since its ATH, small corrections here and there can be expected.
However, these minor corrections most probably wouldn’t affect the larger picture for Cardano.