Concept of Cardano coin Levitating over world network, a Cryptocurrency blockchain platform , Digital money
The Cardano price retreated sharply on Tuesday as cryptocurrencies pulled back. The ADA token declined to Sunday’s low of $2.53, bringing down its total market capitalisation to more than $82 billion. At its peak, Cardano was valued at more than $90 billion.
There are two main reasons why the Cardano price declined sharply today.
First, the decline was mostly broad-based, with most cryptocurrencies retreating. For example, after soaring to a multi-month high of more than $52,000, BTC price declined to about $51,000.
This decline happened mostly because of the buy the rumor, sell the news situation. Earlier today, it was revealed that El Salvador had acquired 200 Bitcoins after the cryptocurrency became a legal tender. Therefore, investors are likely taking profit following this news.
Second, the ADA price is falling as investors take profit after the recent spectacular rally. The rally pushed the coin to an all-time high as investors cheered the recent Alonzo hard fork. This fork will see Cardano introduce smart contracts, which will increase the development of DApps.
Still, Cardano has a key catalyst that will likely push it higher later this month. This catalyst is the third annual event that will feature the leading developers and participants in the ecosystem. In most cases, the price of a cryptocurrency tends to rally towards a key event.
The ADA price declined to $2.52. On the four-hour chart, we see that the coin found a major resistance at the $3.1011 level. We also see that the coin broke below the lower side of the ascending triangle pattern shown in black. It has also moved below the 25-day and 50-day exponential moving averages (EMA).
Therefore, the coin will likely maintain a bearish trend as bears target the key support at $2.00. However, after this, the price will likely resume the upward trend. A move above $3.09 will ne extremely bullish.