Like the rest of the cryptocurrency market, Cardano (ADA) has found itself caught in a downward spiral after Bitcoin hit a fresh two-month low last week after a wave of risk aversion swept through world markets.
Cardano (ADA) has weakened more than 15% since the beginning of August 2023, falling from $0.31 to a low of $0.24. The current price of ADA stands at $0.26, and for now, bears continue to control the price movement.
But where is the price of ADA going next, and what can we expect from September 2023?
Today, Crypto Lists will discuss ADA price estimates from a technical and fundamental analysis perspective. Please note that there are also many other factors to consider when entering a position, such as your time horizon, willingness to risk, and how much margin you have if trading with leverage.
Cardano Foundation working across three core areas
Cardano is a blockchain platform that allows transactions in its native cryptocurrency ADA, and enables developers to build secure and scalable applications powered by it. Cardano is connected with various payment programs, and it is important to say that a variety of projects have been built on the Cardano platform.
Cardano users need to buy ADA to facilitate transactions and participate in governance. Ownership of the token determines who gets to be a slot leader and add new blocks, and who earns a share of fees paid for transactions in blocks. ADA tokens are also used for voting on software policies, such as inflation rate, giving participants an incentive to hold ADA and ensure its future value.
The Cardano Foundation, an independent, Swiss-based non-profit organization tasked with advancing the infrastructure of Cardano, reported that it will continue to work across three core focus areas of operational resilience, education, and adoption of Cardano in 2023.
The Cardano Foundation fostered the adoption of Cardano in 2022 year through targeted partnerships with various organizations, government agencies, and leading universities; for example, Switzerland for UNHCR, the Georgia National Wine Agency, veritree, and the University of Zurich. Frederik Gregaard, CEO of the Cardano Foundation, said:
“I am proud of the achievements we have made over the past year and excited to continue our work to promote a more decentralized future; 2023 has already seen the launch of the Alpha Program of our blockchain course and preparation for a series of technical enablers that will create bridges between blockchain and wider society.”
ADA remains under pressure after Bitcoin hit a fresh two-month low last Thursday, while many cryptocurrencies have had their worst weekly decline since the FTX crash last November. Bitcoin had plummeted below $25,500 Thursday afternoon, hitting its lowest price since mid-June, amid cascading liquidations of leveraged trading positions, and some analysts tied last week’s decline to news events such as macroeconomic gloom.
Increased trading and development activity
However, it is important to say that there has been a significant increase in the number of whale transactions in the last several days, and when whales increase their trading activity, it usually indicates that they are getting confidence in the underlying coin’s short-term price prospects.
According to data from on-chain analytics firm Santiment, Cardano whales have bought the dip and kept on accumulating, and Cardano wallets with a balance of 100,000 or more ADA have reached a 16-month high of 25,294 this week.
Santiment also reported that Cardano has recently come in third place in terms of development activity, behind the “blockchain of blockchains” Polkadot and its public pre-production environment Kusama. The term “development activity” refers to the amount of work completed by a cryptocurrency project’s developers on the project’s public GitHub repositories within the past 30 days.
Increased trading and development activity are certainly positive factors for ADA, but investors should keep in mind that recession fears and aggressive monetary policy from major central banks will continue to influence the cryptocurrency market in the weeks ahead.
Cardano (ADA) is a highly risky investment, while the wider dynamics of the cryptocurrency market also play an important role in determining the price of ADA. There are currently too many important things that could easily go wrong, and a recommendation is that investors should continue to take a defensive investment approach.
Technical analysis for ADA
ADA has weakened from $0.31 to $0.24 since the beginning of this month, and the current price stands at $0.26. ADA might have a hard time holding above the $0.25 level in the upcoming days, and a break below this level would indicate that ADA could probably test the price level at $0.22.
Important support & resistance levels for ADA
On this chart (the period from April 2023), I marked important support and resistance levels that can help traders to understand where the price could move. ADA remains under pressure, but if the price advances above resistance at $0.30, the next target could be $0.33 or resistance that stands at $0.35.
The important support level is $0.25, and if the price breaks this level again, it would be a “SELL” signal, and we have the open way to $0.22.
What speaks for the rise in the ADA price
According to data from on-chain analytics firm Santiment, Cardano whales have bought the recent dip and kept on accumulating ADA even though the cryptocurrency market remains under pressure.
Cardano has recently come in third place in terms of development activity, and increased trading and development activity are certainly positive factors for ADA. If the price of ADA advances above resistance at $0.30, the next target could be $0.33 or resistance that stands at $0.35.
What indicates the downfall of ADA
The last several weeks have been negative for ADA, and investors should continue to take a defensive investment approach as the macroeconomic landscape remains uncertain. The important support level for ADA stands at $0.25, and if the price falls below this level, the next target could be $0.23.
The price of ADA is also correlated with the price of Bitcoin, and if the price of Bitcoin drops again below the $25000 price level, that would certainly have a negative influence on the price of ADA.
What do analysts and experts say?
The cryptocurrency market remains under pressure, Bitcoin’s price recently hit levels below $26,000, and according to analysts, ADA might have a hard time holding above the current price levels.
Some analysts tied last week’s decline to news events such as macroeconomic gloom, while some analysts say that a critical bearish incident that had a major influence on the cryptocurrency market is speculation that Elon Musk’s SpaceX sold $373 million worth of Bitcoin.
Analysts and experts warn that the US central bank will hold interest rates at restrictive levels for a longer period, which is negative for the prices of stocks and cryptocurrencies.
Because of this, they would not be surprised to see Bitcoin below $20,000 again, and if this happens, we could see ADA below $0.20. Bridgewater Associates founder and billionaire Ray Dalio believes that financial markets will be in a poor state for the next five years, and according to Dalio, the same rule will most likely apply to the cryptocurrency market.