Cardano (ADA) Signals More Weakness Despite Bullish Technical Formation

Within the previous 12 months, Cardano (ADA) has been among the leading cryptocurrencies with great performance. Its performance is such that it has posted gains consistently since the beginning of 2020, thereby driving huge inflows of new investors and certain positive fundamental developments.

The latest Shelley mainnet upgrade is among the developments which investors had been expecting for a long time. Investors are expecting the implementation of this upgrade to increase the use of ADA.

In spite of the token’s strength, it has been encountering certain short-term technical weakness together with BTC and almost all other leading cryptos. On August 1, the token rallied to levels close to $0.15 and then encountered a severe selloff that led to a decline towards $0.13.

It has been able to come up with a robust base in this price area, but analysts are currently predicting more near-term declines. This weakness could be sufficient in invalidating a fractal pattern which favored ADA over the previous few days. 

At press time, the performance of the cryptocurrency was somewhat towards the upside at a price of $0.138. This represents a little increase from its latest lows of $0.13 that it tested severally in the previous few days. 

Since its decline on August 1, the crypto has bounced from this level three times, putting in play a possible triple bottom pattern that could enhance its short-term view.

The triple bottom pattern has helped the crypto to secure some strength, but its immediate trend could be majorly based on Bitcoin’s ability to push higher following its decline to $11k.

In spite of the aforementioned factors which favor ADA, an analyst noted in recent times that the crypto can experience more weakness. The crypto is likely to see a more exaggerated move to the downside whenever the market-wide trend is weakened, he continued.

In conclusion, ADA could continue to do better if Bitcoin sustains its uptrend in the near-term.

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