Cardano is one of those interesting projects that gained popularity recently when its prices tripled. Not only was this move backed by strong fundamentals, but the entire cryptocurrency market was also on an uptrend. After the recent crypto crash, ADA prices lost about 40% in a bearish trend that lasted about 20 days. Today, on the other hand, prices are showing a sign of a strong comeback. In this ADA price prediction, we’re going to analyze ADA and set a trade that can easily yield 36%.
Why is Cardano an Interesting Crypto Project?
Cardano is a delegated Proof of Stake blockchain (dPoS), that supports smart contracts similar to Ethereum. The marketing of this project propagates a scientific approach. In fact, the development is under Charles Hoskinson, who comes from a consulting background. He co-founded Ethereum but got kicked out by Vitalik after a dispute about whether Ethereum should be a for-profit project or not. Naturally, Charles wanted the former.
The development of the Cardano was rather slow, with multiple deadlines already pushed forward. With the launch of the staking-mainnet in mid-2020, Cardano was finally able to accomplish an important milestone. With the Alonzo implementation in place, Cardano is ready to reach new highs.
What Happened to ADA Prices so Far?
Since the beginning of the year 2021, ADA’s price tested several times the strong psychological support area of USD 1. We can clearly see this area being tested through the months in figure 1. In mid-August on the other hand, prices managed to escape a key resistance area and sent prices shooting towards USD 3.
When prices broke the strong resistance of USD 1.8, the price of USD 3 was inevitable. This led Cardano to become the third most valued cryptocurrency project by market cap. Its valuation stood at around USD 90 Billion, with the only competitors in sight being Bitcoin and Ethereum.
Following the China ban on cryptocurrencies and in tandem with the cryptocurrency market, ADA prices fell back and retraced to the strong psychological price area of USD 2 (figure 2).
ADA Price Prediction – Can ADA prices reach 3$ Again?
The current technical formation of ADA prices shows a sign of life. In fact, prices managed to break the downtrend and are looking for a potential reversal. In figure 3, we can clearly see this reversal in the trend. This usually confirms a short-term consolidation before going back to its original uptrend.
If prices manage to stay above the psychological price of USD 2, then we should probably see a comeback in prices towards the previous high price of USD 3 in the medium term. Technical traders can plan the following trade setup:
- Entry price: USD 2.2
- Stop-Loss: USD 1.95
- Take-Profit: USD 3
- Risk/Reward ratio: 3.2
- Profit: 36% return unleveraged
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Rudy Fares
