- Cardano is up more than 40% over the past week following new developments around the upcoming Goguen era.
- Despite the hype around ADA, different technical metrics indicate that prices are poised to retrace.
- A spike in the selling pressure behind this cryptocurrency may see it drop towards $0.097.
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The research and development company behind Cardano, IOHK, is preparing to launch a new network upgrade to make the protocol “far superior” than Ethereum. While speculation mounts, data reveals that ADA may still retrace before it advances further.
Expanding the Utility of the Network
Cardano went through an impressive rally over the past week, seeing its price rise more than 40%.
The so-called “Ethereum killer” went from trading at a low $0.076 to a high of $0.107 recently. The bullish impulse seems to be correlated with the significant strides that the IOHK team has made towards Goguen’s release.
The upcoming network upgrade represents a big step forward as it adds the ability to build decentralized applications (dApps) on top of ADA’s protocol, among other features. The head of IOHK, Charles Hoskinson, announced that Goguen would be released in three different phases. But first, the team will be focused on incorporating metadata transfers to help expand Cardano’s utility.
“One side of it is transaction metadata and starting to get to a point where you have non-monetary transactions, so basically saying I am not just sending ADA to somebody, but now this transaction carries a payload with it which has a non-ADA related utility. So, for example, this month, we finished all the metadata stuff, dragged it into the Cardano wallet and then into the node,” said Hoskinson.
Once metadata transfers have been integrated, the ADA network will transition to a multi-asset system. The idea behind such change is to allow users to create their personalized tokens.
Ultimately, Goguen will also bring an “ERC20 token converter” tool to enable firms to migrate from the Ethereum blockchain to Cardano efficiently.
Cardano Looks Poised to Retrace
Despite the excitement surrounding the recent announcement, a particular technical index suggests that the smart contracts’ token is poised to retrace.
The TD sequential indicator presented sell signals on both the 12-hour and 4-hour chart. The bearish formations developed in the form of green nine candlesticks, suggesting a one to four 12-hour candlestick correction before the uptrend resumes.
On its way down, Cardano may find significant support at $0.097. IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model shows that roughly 30,000 addresses had previously purchased more than 3.7 billion ADA around this price level.
Such a massive supply barrier may have the ability to absorb some of the selling pressure behind this altcoin. But if this hurdle fails to keep falling prices at bay, Cardano could drop towards the next area of interest that sits at $0.090.
Here, approximately 20,000 addresses are holding 2.7 billion ADA.
Given the unpredictability of the cryptocurrency market, the bullish outlook cannot be ignored.
A spike in buy orders behind Cardano that allows it to move past the recent high of $0.107 may have the strength to invalidate the pessimistic scenario.
Under such circumstances, the IOMAP cohorts reveal that the next area of resistance lies around $0.115, where 11,000 addresses bought 607 million ADA.
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