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Cardano price locked in consolidation as ADA bears prepare for further decline

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  • Cardano price failed to galvanize investors’ enthusiasm as ADA continues to trend lower.
  • The Ethereum-killer is locked within a consolidation pattern and a lower low could be expected if the bulls fail to retaliate.
  • A recovery for Cardano price could be tough for the bulls, as an indicator suggests that many ADA investors are now underwater. 

Cardano price action has been uneventful, following a 19% drop from the swing high on November 9. It appears that ADA is now trapped within a consolidation pattern with little incentive to reverse the period of underperformance. Further selling pressure could push the Ethereum-killer down toward $1.75.

Cardano price to test lower levels of support 

Cardano price is sealed within a descending parallel channel pattern on the daily chart, confusing forecasts as ADA continues to consolidate. The token is currently discovering lower levels of support, with the first line of defense at $1.90, the September 21 low.

Additional selling pressure could see Cardano price drop toward the 200-day Simple Moving Average (SMA) at $1.87. If ADA loses this foothold and continues to lose strength, bears could be incentivized to push the token lower toward the October 27 low at $1.80.

Cardano price could descend even lower to tag the lower boundary of the parallel channel at $1.75 if the bulls fail to fight back.

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ADA/USDT daily chart

IntotheBlock’s In/Out of Money Around Price (IOMAP) model based on volume suggests that even if Cardano price is able to discover reliable support in the near term, reversing the period of underperformance may be challenging. The IOMAP indicates that ADA investors that are underwater are substantially higher than those that are in the money.

According to the IOMAP, the largest cluster of support is at $1.78, where 53,360 addresses purchased 850 million ADA.

However, if ADA bulls decide to reverse the period of sluggish performance, Cardano price would face immediate resistance at the middle boundary of the prevailing chart pattern at $2.02, coinciding with the 21-day SMA. An additional obstacle would emerge at $2.05, at the October 28 high.

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The IOMAP suggests that the largest cluster of token holders with a total of 418,370 addresses purchased 5.59 billion ADA at an average price of $2.06, which acts as the stiffest hurdle for Cardano price in the near term. 

ADA IOMAP

ADA IOMAP

If Cardano price manages to slice above the aforementioned resistance, ADA would face further headwind at the 50-day SMA at $2.11, then at $2.15, the November 11 high. According to the IOMAP, until the Ethereum-killer manages to break above $2.18, the token may continue to face tough challenges ahead, with little room for bigger bullish aspirations in the near future.

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Cardano Past and Present Challenges in the Crypto Industry

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  • Smart contracts and network scalability has been Cardano’s challenge.
  • Despite this, Cardano (ADA) is still showing an impressive performance in the market.

Cardano (ADA) has been through a mix of positive and negative downsides since its inception. Starting from the past, it has been striving to get a smart contract for smooth platform functionality. Also, apart from this, one key thing that Cardano has faced is scalability, according to a report.

However, this makes people keep doubting how Cardano claims to be an Ethereum killer and also a third-generation blockchain. This was seen from the time that the Cardano team started to fight for smart contract acquisition to make the network stand out among the odds in terms of network scalability.

Cardano has already made a significant step forward by tackling some of its challenges. This includes the implementation of the Alonzo Hard Fork Upgrade, Basho, Mamba, and other network extensions for betterment. Seemingly, all these appear not to serve as a catalyst to solve Cardano’s underlying tragedy.

Mention to the community what are technical challenges openly but not in a sense of FUDing but rather that some solution needs to be found. This could also be a good thing because some community members in the spirit of the decentralized brain could start looking for solutions (research) or even start implementing them (development).

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Nevertheless, regardless of all these, Cardano is still showing an absolute performance in the market. It keeps climbing ranks while rocking new all-time highs. At writing time, ADA price trades at $1.56 with a market capitalization of over $50 billion on Coingecko. This makes it ranks as the 6th largest cryptocurrency in terms of market cap.

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Cardano (ADA) Down 50% from Peak: Possible Reasons

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Largest proof-of-stake network sees its token in multi-week painful decline.

ADA, a core native asset of the newest smart contracts platform Cardano, touched $1.5 in its multi-month freefall. Here’s what makes it plummet before gaining 200% in five weeks.

ADA loses 50% since early September

On Sept. 2, 2021, the ADA price reached its all-time high at $3.10 on the eve of the activation of its smart contract functionality. This major upgrade went live as a result of Alonzo hard-fork mainnet activation in mid-September.

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Cardano (ADA) price loses 50%, here's why
Image by Binance

At the same time, its activation failed to catalyze another wave of ADA price rally: the asset entered a multi-week “bear market.” On Nov. 26, 2021, it reached the lowest level since Aug. 9.

The most obvious mid-term catalyst is the criticism of Cardano’s smart contracts performance. As covered by U.Today previously, the viability, speed and functionality of this system were attacked by both Ethereum (ETH) and Bitcoin (BTC) maximalists.

In terms of short-term bearish catalysts, the most obvious one is the delisting of Cardano’s ADA by eToro, a mainstream derivatives trading platform. eToro restricted its U.S. customers from opening positions in ADA and Tron’s Tronics (TRX) from Dec. 26, 2021.

Will ADA see another rally in 2022?

Cardano’s inventor, Charles Hoskinson, has already slammed eToro’s decision and attributed it to the lack of a global regulatory standard in the sphere of crypto and blockchain.

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As U.Today reported earlier, Mr. Hoskinson is certain that 2022 will be a splendid year for his ecosystem. Speaking about its roadmap for the coming year, he called it a “living ecosystem.”

He calls Cardano’s technology unbelievable and claim

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Red Alert In Crypto Space, Cardano Price Trembling Yet Remains Bullish

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Crypto space witnessed a replica of a May crash but with lesser intensity. Bitcoin price is hovering between $53,800 and $54,400. However, some assets stood strong above their support levels like Ethereum & Cardano.

Despite the bearish trend prevailing in the short-term, yet the ADA price still remains bullish in the higher time frame. 

Cardano price maintained a substantial downtrend ever since the beginning of the present trading day. In the daily chart, the asset has formed a double-bottom and was expected to surge high slicing through the neckline.

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But the asset was rejected at the neckline in the last few hours of the last trading day. ADA price dumped nearly 15% ever since then, however, it’s also attempting to rebound. 

3rd Cardano sell-off is going on since the early hours of the Asian trade. The dump dragged the price much below the 200-day MA and extended the gap between the strong resistance levels around $2.5.

A major reason for the sell-off is speculated to be the pandemic FUD circulating in space. However, the retracement is expected to be well in place as more than 70% of ADA is staked and keeping only 30% in circulation is pretty bullish for the asset. 

Exactly a year ago, the Cardano price was around $0.03 and the asset was surrounded by immense FUD. However, the ADA price didn’t stop then and may not stop now also.

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Collectively the asset maintains a substantial rally ever since it faced an extreme sell-off in September. Yet the strong support levels still reside around $1 and the asset is still bullish until the asset sustains above these levels. 

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