The cryptocurrency Cardano caused a sensation last year. The price exploded to more than 3 dollars in September 2021 and thus reached a new all-time high.
But in the meantime, ADA / USD has seen one of the most violent corrections among cryptocurrencies. The token is currently worth only a tenth of the highest price. Is the important mark of $0.3 now falling too or is Cardano about to have a major trend change?
Buy ADA/USD 85 percent cheaper
ADA/USD is currently trading at exactly $0.3. This could be a good time to buy Cardano, because investors are getting a whopping “discount” of about 85 percent compared to the prices seen at the beginning of September last year. Cardano’s current correction range is within the normal range that can be expected in a bearish market.
Compared to the current decline with previous corrections, there is much to suggest that the bottom is within reach. However, there is still some downside potential.
Historical comparison shows further potential downside
In the 2018 bear market, the price of Cardano fell by a total of 93 percent. Assuming that ADA is now making the same corrective move, the price could still fall to $0.21.
Given the current market conditions with all the uncertainty surrounding the FTX scandal and reports of other crypto exchanges in crisis, this scenario seems quite realistic.
Although a price of $0.21 would be another reduction of about 30 percent from the current price, in a larger perspective it should not make a big difference for long-term investors whether they buy Cardano at $0.3 or $0.2. Because in the long term, of course, investors expect prices that are beyond the $1 mark or even in the all-time highs of $3.
900 percent growth? – Recommended savings plan
Assuming that ADA can really go back to $3, investors who buy Cardano now could realize a whopping 900 percent return. However, whether and when such prices can be expected is another matter.
That’s why experienced investors generally recommend the strategy of not spending their entire budget at once, but instead using dollar cost averaging to get a good average price. For example, if you buy a few ADAs for $0.3 and then have the opportunity to buy the same amount at a lower price of $0.21, for example, you will get an attractive average price of around $0.25.
For investors focused on security, it is advisable to set up their own savings plan and, for example, invest the same fixed amount every month, which can be omitted from the income without omitting essentials or without to be able to attend to other things. financial obligations.
Your Cardano may have bottomed out
However, seeing Cardano prices even lower is not a foregone conclusion. This could be countered by the fact that the corrections in each bear market have always become a little smaller, which is best reflected by the price of Bitcoin, which has been around for the longest time. For BTC/USD, the usual correction of 90 percent initially has moved closer to the 80 percent mark. At the same time, however, the upside potential in the bull market also decreased from half to half.
Technical chart analysis shows where the price of ADA/USD could go next. Analysts also say what prices they expect for Cardano in the medium and long term.
Cardano is an open platform that seeks to provide economic identity to the missing billions by providing decentralized applications to manage identity, value and governance.
— Charles Hoskinson (@IOHK_Charles) August 2, 2020
Major resistance at $0.37
Looking at the daily chart, ADA/USD has been falling in a wedge formation since May this year. This is a bullish pattern where a break above the resistance line to the upside is most likely.
Currently, ADA/USD was able to successfully confirm the support at $0.3 again and for today it looks like a daily green candle. ADA has already tested the support about 10 times in the last few months.
The resistance zone is currently around $0.37. With a 20 percent boost, Cardano could get back into that range. If ADA/USD succeeds in this and a confirmed breakout also occurs in the next phase, the technical price target is above $0.6 and could give ADA a near 100 percent pump from current levels.
One big eruption in February 2023?
However, there is still a long way to go and the probability is quite high that ADA/USD will consolidate in the chart pattern for some time before a decision is made. In theory, ADA/USD can stay in the pattern until February 2023 before the pattern reaches its endpoint. However, for most chart patterns, a breakout occurs after 70 to 80 percent of the maximum distance, so the breakout is still possible in 2022.
If you want to trade a potential breakout from the chart pattern on a crypto exchange to maximize profit with a leveraged position, you should wait for confirmation of the previous support or resistance as a new resistance or support.
Analysts expect a Cardano price of $6
For the bearish case that the price is breaking out of the chart pattern to the downside, the price could drop to a technical price target below $0.04. That would mean a virtual total loss for many investors who bought Cardano last year.
However, analysts do not assume that Cardano will fall towards 0 dollars in the future, but they are bullish on the whole.
Digital Coin Price’s price forecast predicts that ADA will rise again to $0.8 next year and may break the $1 mark in 2024. However, a new all-time high is not expected until 2029. In the long term, the analysts even think that prices of more than 6 dollars are possible.
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