The Cardano price staged a strong recovery in July. After crashing to a monthly low of $1.0205 in mid-July, the price jumped by more than 30% in the final week of the month. This recovery helped push the total market value of ADA to more than $43 billion.
ADA price action in July
Cardano soared to an all-time high of $2.46 in May this year. The coin then saw its price declined to a low of $0.9488. The decline was part of the overall sell-off in cryptocurrency prices. As this happened, the total of volume traded declined substantially as most holders exited their trades.
In July, the price crashed as the number of Covid cases rose in most countries. At the time, the decline coincided with the overall sell-off of other assets like stocks and commodities.
The price then bounced back as investors looked at the positive side. For one, the rising cases meant that many central banks will maintain their hawkish stance. Indeed, last week, the Federal Reserve sounded a bit dovish when it made its interest rate decision. The bank is now expected to start tapering in January instead of the fourth quarter.
Therefore, there are signs that the Cardano price will soar in August. First, Bitcoin seems to have stabilized above $40,000. This is important because most altcoins have a positive correlation with Bitcoin. As such, the price will likely keep rising if BTC maintains its bullish momentum.
Second, there is the positive catalyst of smart contracts. Cardano developers expect that more app developers will embrace its network in their development.
Cardano price prediction
The third reason is shown on the daily chart. As you can see below, the coin struggled moving below the important support at $0.9965. The price is along the 25-day and 50-day exponential moving averages (EMA). Therefore, if the coin can remain above the support at $0.9965, there is a possibility that it will break out higher to about $2 in August.
However, there is a major risk. As you can see, the coin has formed what looks like a head and shoulders pattern. In price action, this is usually a major bearish signal. You can learn more about this in our free trading couse. Therefore, a move below the neckline at $0.9965 will invalidate the bullish view. This will see it move below $0.5.