Why is the price of Cardano down today?
Cardano's (ADA) price fell today, reflecting traders' cautious sentiment ahead of the blockchain's first hard fork in two years.
Chang's hard fork brings onchain management to Cardano
ADA's price has fluctuated between gains and losses over the past 48 hours. In the year It fell 1.5% to $0.35 on August 30, erasing nearly all of the previous day's gains.
ADA/USDT Daily Price Chart. Source: TradingView
This discrepancy between bulls and bears shows traders' uncertainty about the impact of the Cardano Chang hard fork on the ADA markets.
The network update will go live on September 1st, allowing users to participate in onchain management between Cardno's top rivals, including Solana (SOL) and Ether (ETH).
RELATED: Cardano (ADA) loses top 10 crypto spot as Tron sees growth
That said, ADA holders can elect representatives (dReps) to vote on improvement proposals and future technical changes on the Cardano blockchain, which should theoretically improve the network, which could increase demand for the token.
However, ADA underestimated the broader crypto market in 2024, particularly its blockchain rivals. The Cardano token is down 45% year-to-date compared to Solana's 26.75% gain and Ethereum's 6.75% gain.
Year-to-date performance of the top-15 crypto assets by market value. Source: Masari
A collapsed wedge design lowers the ADA value
Cardano's daily losses are part of a multi-month falling wedge pattern characterized by two dips, combining with downtrends.
In early August, ADA retested the wedge's upper trend line as resistance and has declined 15% since then, including today's 1.5% decline. As seen below, the cryptocurrency may continue to fall until it reaches the top of the wedge around $0.26.
ADA/USD Daily Price Chart. Source: TradingView
However, falling wedges usually result in significant reversal trends when the price breaks above the upper trend line and increases with the greater distance between the upper and lower trend lines.
Applying the same technical rule to the ADA falling wedge would bring it to the $0.47-0.65 range in October, depending on the breakout point.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
