The bullish depletion of Bitcoin and Ether, Cardano’s FOMO smart contract, and a general boom in the altcoin market have catalyzed ADA’s gains.
Cardano’s native token ADA ignored a serious price drop warning to climb to a new all-time high.
The ADA / USD exchange rate hit $ 2.56 for the first time on Friday, following a 154.54% price boom that began on July 20. In doing so, the pair also ignored veteran trader Peter Brandt’s 60% -90% price drop warning, which was based on a classic bearish pattern called the head and shoulders.
I remember being mercilessly mocked when I identified this cap on $ LTCUSD in mid-2018
Hello cardano trolls $ ADAUSD, point… pic.twitter.com/3gytNHW4cR
– Peter Brandt (@PeterLBrandt) July 30, 2021
But a surge of bullish fundamentals helped Cardano ignore the bearish technical setups.
At first, ADA / USD’s bullish rally in the early days appeared largely in the wake of a similar boom in the cryptocurrency market, led by the euphoria surrounding the major software update from rival Ethereum, and New endorsements for Bitcoin from Tesla’s Elon Musk and Twitter. Jack Dorsey.
ADA prices also followed Bitcoin (BTC), which has recently recovered above $ 48,000. But the Cardano token began to outperform Bitcoin after Tuesday, as the latter was stuttered by the US Federal Reserve’s phasing-out decision, as Cointelegraph covered here.
ADA price trends (black and white) vs BTC price trends (red and blue). Source: TradingView
In detail, the ADA / USD exchange rate rose 36.81% from its Wednesday low of $ 1.87 versus BTC / USD’s 7.91% rally in the same period.
Other major altcoins also outperformed Bitcoin, suggesting that traders simply turned capital out of the flagship cryptocurrency market for risks of overvaluation.
Adjusted 24-hour performance of Altcoins against the US dollar and Bitcoin. Source: Messari
FOMO smart contracts
Merchant offers for ADA also increased due to hype surrounding Cardano’s “Alonzo” update, which is scheduled for mid-September. The update hopes to implement smart contract functionality on Cardano’s blockchain, a step that, according to supporters of the project, will make it a direct rival to Ethereum.
#Cardano #smartcontracts are coming …
We are on track to meet the projected HF dates for the #Alonzo testnet and mainnet update, as Nigel described in last week’s update.
A new era is scheduled to begin on Sunday, September 12, 2021 $ ADA pic.twitter.com/HrdrqYizhP
– Input Output (@InputOutputHK) August 17, 2021
Smart contracts would allow Cardano to integrate more decentralized applications into its ecosystem, in particular decentralized financial platforms that enable automated lending, lending, and business services.
It seems less likely that traders will notice Brandt’s bearish setup in the face of bullish Cardano fundamentals.
The ADA / USD daily chart shows the pair at price discovery. Meanwhile, a Fibonacci retracement chart outlined from the $ 2.51 high to $ 1.05 low signals that the ADA tests $ 2.51 as its interim resistance level.
Related: Bullish Cup and Handle Pattern Sets Cardano (ADA) Price for New ATH
A close above said price ceiling puts ADA / USD on its way to the next resistance line at 1.618 Fib Line near $ 3.41.
Technical setup of the ADA / USD daily chart. Source: TradingView
By contrast, ADA’s Daily Relative Strength Indicator (RSI), now above 70, has warned of its tentative overvaluation risks. As a result, ADA / USD may undergo a certain degree of correction to neutralize its overbought state, with the next support target located near the 0.786 Fib line (at $ 2.20).