Cardano (ADA) price appears to have lost momentum after a big rally in April. ADA coin had a 15% surge in the first half of April 2023. However, the price action reversed in the second half of the month as BTC failed to break above $30k. This resulted in a rejection of ADA price from its YTD high of $0.46.
On Tuesday, cryptocurrencies are trading sideways as BTC consolidates around $28,000. Most traders are awaiting the next Bitcoin move as the markets enter deep into a volatile week. Tomorrow’s FOMC decision is expected to keep the prices in check for the rest of the week.
ADA Price Lags As The TVL Increases
According to the decentralized finance (DeFi) tracking website DFi Llama, the network activity on the Cardano blockchain has ramped up since the start of the year. There has been a significant increase in the total locked value (TVL) which has tripled within the last four months. Currently, there is $157 million TVL on the top smart contract platform.
Despite a soaring TVL and an increase in adoption, Cardano price has failed to generate similar returns for its holders. The price is currently 16% down from its yearly highs, and technical analysis shows that it can get a lot worse if BTC drops from here. The FOMC’s rate decision will be a very critical event for crypto markets as analysts expect another 25 bps hike.
Cardano Price Forms H&S Pattern
The ADA price chart on a daily timeframe suggests that the time is running out for the bulls. This is because the price is forming a head & shoulders pattern, which is considered one of the most bearish reversal patterns. However, the pattern is not complete yet, as the neckline is still not broken. A daily closure below $0.37 will make Cardano price prediction extremely bearish.
In such a scenario, the measured move from the H&S breakdown gives us a target of $0.30, which is 20% below the current price level. The only way to avoid this bearish outlook is to break above the $0.40 resistance soon.
I’ll keep posting my updated outlook on Cardano in my free Telegram group, which you’re welcome to join.
