Cardano is under pressure as demand for cryptocurrencies is declining. It is trading at $1.30, about 46% below this year’s high. The decline brought the total market value to over $41 billion. Cardano has thus become the 5th largest cryptocurrency in the world.
Cardano (ADA/USD) started in 2015 as a blockchain project developed by Ethereum co-founder Charles Hoskinson. The network helps developers build decentralized projects that solve real-world problems. For example, companies can use the network to solve fraud related issues so universities can better distribute their certificates.
Cardano’s roadmap consists of five basic steps. Byron lets people buy and sell ADA. The decentralized system Shelley and Goguen followed suit. Goguen enables smart contracts that are useful in building decentralized applications. The next two stages are the Basho and Voltaire stages; Basho is all about scaling, while Voltaire is all about maintenance.
Cardano price has risen strongly as investors embraced the platform. Interest in Cardano was mostly driven by Charles Hoskinson’s reputation and belief in the platform. At its peak, ADA had a market cap of more than $60 billion.
Recently, it has dropped in price as demand has dwindled. It stems from price regulation and monetary policy fears. As the American economy recovers, there are fears over the monetary policy the Fed will adopt. In many cases, risky assets like cryptocurrencies and growth stocks tend to underperform when monetary policy is tight.
Cardano price also underperformed due to continued pressure in China. The country has directed all banks and financial companies to investigate accounts related to their currency.
Figure 1. Cardano price analysis
According to the weekly chart, it looks like ADA price has been struggling lately. It is trading at $1,3030, its highest price on July 1, 2018. Cryptocurrency has formed the appearance of a cup and handle pattern.
This consolidation seems to be part of this chart. It also broke above the 25-day and 50-day exponential moving averages (EMA). Therefore, the price may recover soon, as a cup and handle is often a sign of a bullish continuation.