The ADA price is struggling even as other cryptocurrencies rebound. The Cardano price is trading at $2.1693, which is about 4.85% above the lowest level this week. This price is about 30% below its all-time high of about $3.
Cardano still lags peers
The ADA price has struggled in the past few weeks. While Bitcoin has surged to more than $58,000 and Ethereum remains steady above $3,600, the coin has struggled to break out. As a result, it has been passed by Binance Coin, which is now the third biggest cryptocurrency in the world.
It is not clear why Cardano, once a favorite among retail traders, has struggled against its peers. The only reason that comes up is that investors are paying a close attention to the impact of the recent Alonzo update that led to the launch of smart contracts in its ecosystem.
In my view, I think the Alonzo update was the most important transition of Cardano because it means that developers can now build decentralized applications. Think of Cardano as the iPhone that lets developers build apps for the iOS operating system.
The challenge is that Cardano could turn to be like Windows, which struggled to find developers for its ecosystem. While some developers have started building, it’s still too early to determine how successful they will be.
The ADA price has also struggled because many investors who bought the previous rally have started to exit their positions. This situation happens when the price of an asset crashes after recording a strong rally. It is often known as a distribution.
The four-hour chart shows that the ADA price is struggling to find direction. The chart shows that the coin has formed a triangle pattern that is shown in blue. This triangle is close to its confluence zone, meaning that it could soon have a break out.
At the same time, the price is oscillating at the 25-day and 50-day moving averages while the Average True Range (ATR) has dropped. The ATR is one of the most popular measures of volatility in the market.
Therefore, there is a possibility that the coin will have a breakout in the near term. Since this is a symmetrical triangle, it means that the coin will break out in either direction. The key levels to watch will be the resistance at $2.5 and the support at $2.0.