ADA might soon break from massive technical pattern, which may bring many surprises
The relatively weak price performance on Cardano may end soon as the cryptocurrency nears a breakout from the nine-month-old chart pattern that will most likely fuel a spike in volatility.
According to the asset’s daily chart, Cardano still remains in a long-term downtrend since September 2021, when ADA reached the current all-time high of $3.1 after the announcement of smart contracts technology. Unfortunately, ADA missed the rally on the cryptocurrency market back in November and struggled to show any kind of positive price performance.
With the gradual decrease in ADA volatility, we have seen the formation of a massive long-term falling wedge pattern, which could become the foundation for a global trend reversal for Cardano.
At press time, Cardano is moving closer to the narrow part of the pattern, which indicates that we will most likely see a breakout in either direction quite soon. Unfortunately, there is no proper way of determining the direction of a breakout since it is affected by a variety of independent factors.
The fundamentals follow
The most recent rally on Cardano was fueled by the fundamental growth of the network, which attracted millions in user funds after the release of the first decentralized applications.
Because of the outflow of funds from the DeFi industry, Cardano-based applications lost a major part of their TVL, causing a slight crisis in the ecosystem. But despite that fact, Cardano developers are getting ready for a summer rich with new decentralized solutions and application releases.
At press time, ADA is trading at $0.5 and has lost more than 5% of its value in the past 24 hours following a modest correction in the cryptocurrency market.
