ADA Near Oversold Levels, Why Cardano Could Retake Previous Highs
Cardano (ADA) has been one of the most resilient coins in the crypto market. While Bitcoin has experienced a 50% correction and has revisited the yearly open, ADA has traded well above its previous lows.
At the time of writing, ADA trades at $1,14 with a 2.7% and 4.8% loss in the daily and weekly charts, respectively.
The cryptocurrency has managed to make its way into the crypto top 5 by market capitalization after Dogecoin (DOGE) and XRP lost their positions. The latter has been severely hit by the bearish trend and stands at $0,18, while XRP stands at $0,58.
At its current levels, Cardano (ADA) recorded a recent Relative Strength Index (RSI), a metric used to the price momentum of a cryptocurrency, low of 27, according to trader Eric Thies. He believes ADA was at a similar low on this metric during March 2020, before the event called “Black Thursday”.
As seen in the chart below, last time ADA was at an RSI low, it saw a parabolic increase in its price in the coming months. Thies believes this time it could be more positive, as ADA is resting on former ATHs.
In current market conditions, most coins tend to correlate with Bitcoin and its performance. Therefore, BTC’s price must continue with its recovery in order for ADA, ETH, and other cryptocurrencies to recover.
Pseudonym trader Crypto Punisher has compared the ADA/ETH trading pair and found a positive outlook for the former. Ethereum has been one of the top performer cryptocurrencies in recent months, but the trader believes Cardano (ADA) could take that place:
(…) at macro level support as ETH continues to show strength. given that ADA has held strong all throughout this downtrend I think a bounce to outperform ETH short-term is enticing enough R:R wise.
What Could Push Cardano (ADA) Into New Highs?
One of the key factors that have been affecting Cardano and its price action, it’s the upcoming roll-out of their smart contract platform, Plutus. Input-Output Global (IOG) is currently testing the update in color code phases, they have successfully completed AlonzoBlue, part one, and have into AlonzoWhite.
Plutus will be introduced in a Hard Fork Combinator by some point in late 2021. IOG’s founder and Cardano creator Charles Hoskinson made an Alonzo Update via his YouTube channels and said:
Everything is looking pretty good, looking like it’s on schedule. Application backend integration is on schedule, the wallet backend integration is on schedule. We have a working Alonzo node, it survive the blue era. Now, we are in the white era.
Hoskinson added that they are “mass onboarding people” to collaborate with the testnet and Cardano’s developer is working on the new version for the Alonzo node. As the final implementation approaches, ADA could see further benefits and push its way into uncharted territory.