Cardano faces a 60%-90% risk of falling, ADA warns traders to portray a classic bearish pattern

Cardano is about to gain the title of a mature smart contract platform. The key upgrade in mid-JulyCharles Hoskinson, the founder of the project, confirmed that they recently processed the sale of non-fungible tokens worth more than $10 million on the public ledger.

In addition, a NFT and DeFi market is called Spore NetIn the fundraising event, it raised 2.3 million US dollars and stated that it will deploy its services on the Cardano chain to reduce transaction costs, reduce carbon footprint and increase transaction throughput.

But the growth of Ethereum’s competitors as a project may not lead to higher adoption of its native cryptocurrency. have, At least according to an analysis shared by Peter Brandt, CEO of global trading company Factor LLC.

Will there be a 60%-90% crash in the future?

The senior analyst shared his bearish setting for ADA in a tweet posted on Friday.he Quote A classic technical pattern, called head and shoulders, is used to predict the downside of Cardano tokens. This pattern has risen by more than 600% in the year-to-date time frame.

In detail, when the price forms three consecutive peaks at a single support level, a head and shoulders shape is formed, provided that the middle peak is higher than the other two peaks that usually have the same height. The price eventually broke the support level (also called the neckline) and fell to the maximum height between the top of the intermediate peak and the support level.

ADA clearly fits the description, as shown in the diagram shared by Brandt.

Cardano’s head and shoulders set.Source: TradingView.com, Peter Brandt

Analysts expect the ADA/USD exchange rate to fall to US$0.12, which is 90% lower than the currency pair’s current bid of close to US$1.26. Percentage-based calculations for the head and shoulders pattern indicate that its profit target is close to $0.35, which is 60% below the neckline.

Brandt recalled his record of predicting the top of the market to increase the strength of his depression predictions for Cardano. For example, an analysis he conducted in 2018 involving Litecoin corrected the setting of a descending triangle after the altcoin rose from $4 to $420 during the 2017 bull market.

“I remember when I determined this top of LTC/USD in mid-2018, I was mercilessly mocked,” Brandt tweeted. “Hey Cardano troll, aim.”

But will it repeat itself in 2018?

The crash after the bull market in 2017 was mainly due to the so-called initial coin issuance depression.A sort of Research conducted by Statis Group He pointed out that at the time, more than 80% of the blockchain startups that raised funds with Bitcoin, Ethereum and other top tokens failed to launch a workable product.

At the same time, most of them proved to be outright scams, selling the encrypted funds raised, which put downward pressure on the entire market. Due to the launch of ICO FUD, Litecoin, Bitcoin and Ethereum plummeted by more than 80% in 2018.

In contrast, the bull market in 2020 came after macroeconomic mistakes.Federal Reserve Efforts to contain the economic consequences In the Covid-19 crisis, it launched an unprecedented quantitative easing program. As a result, near-zero interest rates and $120 billion worth of asset purchases prompt investors to look for better options in riskier markets every month.

As a result, Bitcoin soared from less than $4,000 in March 2020 to over $65,000 in April 2021. At the same time, altcoins, which tend to keep up with Bitcoin trends, have also soared. Cardano’s ADA is one of them; it is now trading at more than 7,000% higher than the bottom in mid-March.

According to the data, the 30-day correlation between Bitcoin and ADA is close to 0.85, which is higher than zero Offered by Crypto Watch.

related: Waiting for Alonzo: Cardano smart contract is fully launched

Simon Kim, CEO of crypto venture fund Hashed, told Cointelegraph in March that the crypto market in 2020-2021 is completely different from the crypto market in 2017-2018, and pointed out that the market is now operating on completely different fundamentals. He says:

“Firstly, various DeFi projects are creating value based on clear business models. Secondly, we have seen record-breaking active investments by institutional investors. Finally, various imports and exports, including not only PayPal and Visa, but also large banks, are now Is rising.”

Rekt Capital, a pseudonymized market analyst, famous ADA needs to close above its weekly closing price of $1.30 to confirm its long-term bull market trend. Rakesh Upadhyay of Cointelegraph also Point out A breakthrough of $1.33 will increase the Cardano token’s potential to extend its upward target to $1.90.

“On the contrary, if the price falls from the current level or above resistance and breaks below $1.20, it indicates that the shorts continue to sell at every higher level. This may lead to a retest of the key support level of $1,” Upadhyay warned. despite this.

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