The Alonzo White test net kicked off on 15 July as Cardano inched closer towards enabling smart contracts on its platform. The recent upgrade allows about 500 users to test its smart contract features, a significant size up when compared to Alonzo Blue which was open to a limited number of participants.
With planned upgrades on track as per Charles Hoskinson, Cardano’s native cryptocurrency, ADA was rather unpredictable on the charts. At the time of writing, ADA held the 5th position in the crypto rankings, with a market cap of $38.3 Billion.
Cardano 4-hour chart
Source: ADA/USD, TradingView
Since the first week of July, Cardano has traded within the confines of a down-channel as the digital asset steadily declined in value. Losses amounted to 23% when calculated from the highest point of the channel at $1.49 to the lowest point of $1.15. At press time, prices tested the half-line of their pattern which clashed with the 20-SMA, and a successful close above the region would back chances of a further rise over the coming sessions. This would see prices touch the $1.26-mark and the upper trendline of the pattern. If the 20-SMA denies an upwards breakout, ADA could see some sideways movement between $1.17-1.19 till the broader market signals a more definitive move.
Reasoning
Directional Movement Index’s -DI and +DI closed in on a crossover and signaled a potential trend shift in favor of the bulls. The Relative Strength Index has been forming higher highs on its ascent towards equilibrium. If the index manages to rise above 50-55 and heads into bullish territory, a favorable outcome can be expected. Awesome Oscillator noted some upwards momentum but the same was not yet enough to trigger a sharp price swing.
Conclusion
ADA was on the cusp of an important development- one that could determine its short-term trajectory. A successful rise above the 4-hour 20-SMA and half-line of its pattern would provide confirmation of a bullish outcome and prices could surge towards the $1.26-mark. Failing to do so could see some sideways action between $1.17-1.19, from where a drop towards $1.13 would be possible.
