Cardano (ADA) struggles at $0.682, facing resistance at $0.6890 as Ethereum’s Pectra upgrade could negatively impact its value. Technical indicators highlight immediate support at $0.677, but risks remain due to potential long liquidations and decreased whale activity. Despite challenges, a rise in stablecoin market cap on the Cardano blockchain offers a hint of optimism.
Cardano (ADA) is currently priced at $0.682, finding it tough to overcome a resistance level at $0.6890. Meanwhile, Bitcoin is trading at $96,968, reflecting a slight drop of 0.39% today. The looming Pectra upgrade from Ethereum, which went live on May 7, poses potential risks for ADA. Historically, when Ethereum has made major upgrades, adverse effects on ADA’s value followed, suggesting possibly turbulent times ahead.
Looking back at the past, ADA has often suffered following Ethereum’s network enhancements, which typically focus on improved scalability and user engagement. For instance, during the London upgrade in 2021, which introduced a transaction fee burn mechanism, Cardano’s value experienced a notable downturn. Following Ethereum’s transition to a proof-of-stake system, known as the Merge in 2022, ADA’s price also fell. If this trend continues, we could see ADA struggle after the Pectra launch.
On the technical side, ADA is testing a key descending trendline, which has been a resistance point since the end of April. Immediate support is noted at the 50-period Exponential Moving Average (EMA) level of $0.677, where the MACD indicator currently signals bullish momentum. If traders are considering entry points, buy signals above $0.690 could suggest significant price upward movement.
For those looking into stop-loss strategies, levels below $0.666 serve as key support thresholds. As for targets, if ADA can sustain its momentum, a take-profit point could be around $0.707, aligning with the next significant resistance level. However, falling below $0.677 risks a retest at $0.666, potentially leading to a broader decline towards the $0.6430 region.
Moreover, another critical aspect for Cardano is the potential threat of long liquidations. If ADA were to slip to vital support levels around $0.66, there’s a chance that over $5.4 million in long positions may be triggered for liquidation. This scenario could amplify sell-offs in an already fragile market environment.
Adding to the bearish sentiment, decreased whale activity has resulted in a marked decline in transaction volumes. Analysts highlight this as concerning, emphasising an 83% drop in whale transactions. Such reductions could hinder ADA’s recovery efforts and erode investor confidence.
Nevertheless, it’s not all doom and gloom for Cardano. On a brighter note, recent data from DeFiLlama has shown a significant increase in stablecoin market cap on the Cardano blockchain. This uptick in stablecoin value suggests a possible rise in network activity, presenting a glimmer of hope for ADA’s short-term momentum.
