Cardano’s native cryptocurrency, ADA, is once again underperforming compared to other top altcoins. While the market has recovered nicely following last week’s crash, with coins like AVAX, DOGE, SOL, and TON in the top 15 producing double-digit gains over the last seven days, ADA is up only 2%.
This meager increase is smaller than even XRP’s 5% gain, another coin that’s giving its owners a headache. ADA is currently trading around $0.46, down from its 2024 yearly highs of around $0.77 (set in March) and still nowhere near its all-time high from 2024 of close to $3.
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Concerning Technical Indicators
Upon analyzing the ADA/USDT chart, one technical indicator is particularly worrying: the 200-day moving average. This indicator is a widely used tool that smooths out price data by calculating the average closing price over the last 200 days. It is often used as a gauge of the long-term trend, with prices above the 200-day moving average considered bullish, and prices below considered bearish.
For ADA, the 200-day moving average is currently at $0.52, which is higher than ADA’s current price. This is a bearish signal, as it indicates that the long-term trend is downward, and the asset is struggling to maintain its momentum. It’s a concerning situation, especially in a bull run like the one we’re currently experiencing.
At CaptainAltcoin, we perform technical analysis on coins daily, and it’s rare to see a top coin trading below its 200-day moving average during a bull run. This further emphasizes the concerning nature of ADA’s current position.
More Bearish Signals
Another worrying sign is that the MACD (Moving Average Convergence Divergence) line is below the MACD signal line. The MACD is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. When the MACD line crosses below the signal line, it’s a bearish signal, indicating that the momentum is shifting to the downside.
Additionally, the Relative Strength Index (RSI) across all timeframes is between 30 and 40. The RSI is a momentum oscillator that measures the speed and change of price movements. Traditionally, an RSI below 30 is considered oversold, while an RSI above 70 is considered overbought. A value between 30 and 40 suggests that ADA is in a downtrend and lacks buying pressure.
Read also: Hedera (HBAR) and Cosmos (ATOM) Prices Pumping – Here’s Why
Potential for Further Downside
Interestingly, ADA is still trading inside a parallel channel between the $0.42 and $0.77 area. If it breaks below the $0.42 support level, it could signal a more significant downtrend and potentially lead to further losses.
Given these technical indicators, it’s challenging to predict where ADA could go from here. However, a break below the $0.42 support level could lead to a deeper correction, while a sustained move above the 200-day moving average could signal a potential reversal and a return to bullish momentum.
Potential Cardano-BCH Partnership
Meanwhile, Charles Hoskinson, the founder of Cardano, recently tweeted: “Would you like to see Bitcoin Cash become a Cardano Partnerchain upgraded with Useful Proof of Work Leios, NiPoPoWs, and Ergo tech, thus being the fastest and most useful proof of work chain ever built?”
Hypothetical Poll:
— Charles Hoskinson (@IOHK_Charles) May 4, 2024
Would you like to see Bitcoin Cash become a Cardano Partnerchain upgraded with Useful Proof of Work Leios, NiPoPoWs, and Ergo tech, thus being the fastest and most useful proof of work chain ever built?
This tweet suggests a potential partnership between Cardano and Bitcoin Cash (BCH), where BCH could become a Partnerchain on the Cardano network, leveraging its Proof of Work (PoW) capabilities and integrating with Ergo, another PoW blockchain. Such a partnership could potentially enhance BCH’s functionality and position it as a leading PoW chain.
While this development could be exciting for both communities, it remains to be seen how it will impact the price and adoption of ADA and BCH. Investors will be keeping a close eye on further announcements and developments regarding this potential partnership.
Conclusion
In conclusion, Cardano investors are facing a headache as ADA’s price struggles to keep up with other top altcoins, displaying concerning technical indicators. However, the potential partnership with Bitcoin Cash could bring new opportunities and revive interest in the Cardano ecosystem. As always, investors should conduct their own research and exercise caution when making investment decisions.
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