Cardano Dips as Market Sentiment Sours, But Fundamentals Offer Hope

Cardano (ADA) is off to a rocky start in early trading on Friday, turning bearish as the market sentiment towards cryptocurrencies in general sours with the slide in Bitcoin prices. At the time of writing, ADA/USD is trading around $1.66.

The Ethereum killer is down by more than 7% in the past 24 hours alone, but is still on course for a weekly gain of nearly 10%. Despite the bearish mood in the overall crypto market, promising fundamentals support a possibility of the current downtrend being short-lived.

Earlier this week, IOHK – the firm behind the development of Cardano, rolled out the first testnet for the Alonzo upgrade – a key move forward that will enable smart contract capabilities on its network. This important move brings ADA investors one step closer to realizing their DeFi aspirations on this network, and a sign that it is ready to take Ethereum head on in its key strength area.

Since the beginning of this year, ADA/USD has strengthened by almost 1,000%, notwithstanding the crypto market crash of mid-May, and shows significant promise to head to newer highs in the coming months. Another key news that is likely to offer support to Cardano’s price in the near-term is the announcement of its first cross-chain bridge with Nervos (CKB) which will roll out within the next couple of months. This interoperability feature will offer higher levels of scalability, value and usability for its users.

Key Levels to Watch

On the H4 price chart of ADA/USD, there appear to be some mixed signals offering a sliver of hope – while most of the smaller moving averages and the MACD indicator are offering a bearish bias, the momentum indicator is pointing to a bullish trend. On a positive note, the price is sitting comfortably above the pivot point at $1.55 and looks set to make a play for the next resistance level at $1.77.

A break above this level can see buying action until $1.91, where there could be some more resistance. On the other hand, if the market sentiment worsens further, we could see Cardano’s price falling all the way down under $1.50 until the support level at $1.33.