Key Takeaways
The ADA price has fallen since its yearly high of $0.81 in March. While the price bounced on Aug. 5, it has struggled to initiate any sort of significant upward movement. Moreover, ADA trades within a corrective pattern.
Can ADA regain its footing and begin a bounce that breaks the corrective pattern, or will it break down instead, continuing its bearish trend? Let’s find out.
Cardano recently launched the Ouroboros Praos protocol, designed to improve transaction stability. The team is now focusing on Ouroboros Peras , an enhancement that introduces a new voting layer, reduces the probability of rollback, and enables faster block settlement.
One of Peras’s main improvements is modifying the chain selection rule, which now selects the heaviest chain instead of the longest chain.
Instead of just focusing on the number of blocks, the support of stake pool operators also determines the weight of the chain. A chain that has more support from SPOs has faster settlement, greater stability, and enhanced security.
Cardano founder Charles Hoskinson recently said that the next upgrade should focus on validation zones, which would greatly improve Cardano.
This came after comments by Cardano developer Andrew Westberg who said that focusing on validation zones , allowing for unspecified transactions to be completed in sequence, and allowing users to pay transaction fees in non-ADA currencies should be the main priority of developers.
Let’s look at the Cardano price action and see if this can catalyze a price bounce.
The daily time frame ADA price chart gives a bearish outlook. This is because the price action shows movement inside an ascending parallel channel, considered a bearish pattern.
The Cardano price trades in the channel’s lower portion, making a breakdown more likely.
Technical indicators give a mixed outlook. The Relative Strength Index (RSI) is at 50 while the Moving Average Convergence/Divergence (MACD) is at 0, both signs of an undetermined trend.
If this breakdown happens, the ADA price could fall to the long-term range low of $0.24.
The weekly time frame outlook shows that ADA has traded between $0.24 and $0.45. It is currently in the middle of this range.
A breakdown from the channel will also trigger an ADA price drop below the range’s midline.
As a result, it could trigger a downward movement toward the next horizontal support at $0.24.
The ADA price bounce since Aug. 5 has been subdued relative to the rest of the crypto market. This trend is set to continue soon, especially if ADA breaks down from its ascending parallel channel.
If this happens, it could trigger a drop toward the next horizontal support at $0.24.