In theory, the upcoming Midnight launch should benefit the falling Cardano price. However, technicals suggest that the ADA token may be on the verge of a bearish breakout in the coming days or weeks.
Cardano Price Technicals Suggest it May Crash Soon
The daily timeframe chart reveals that the ADA price has remained under pressure in the past few months as it plunged from a high of $1.0160 to the current $0.4300.
Cardano price has continually formed a series of lower lows and lower highs as bears prevailed each time it attempted to rebound.
It formed a death cross pattern on October 22nd when the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. This pattern confirmed the bearish outlook, and it partially explains why it remains in a deep bear market.
Most importantly, the value of ADA has now formed an inverse cup-and-handle pattern whose lower side is at $0.5015 and upper side is at $1.0183. It has also moved below the lower side, confirming its potential bearish breakout.
ADA price is also forming a bearish pennant pattern, which is made up of a vertical line and a triangle consolidation pattern. Therefore, there is a risk that the coin will continue its freefall in the coming days.
One way of finding the target price is to measure the distance from $1.0183 to the cup’s lower side. After that, one measures the same distance from the cup’s lower side, which, in this case, brings the target price to $0.2495, which is about 50% below the current level.
Cardano Price ChartThe bearish ADA price forecast will become invalidated if it moves above the key resistance at $0.50.
Why Midnight Launch May Not Boost ADA Token
The main catalyst for the Cardano price is that the developers will launch the Midnight sidechain on Monday next week. This launch will come a few days after they unveiled the NIGHT token.
The mainnet launch will enable developers to start growing the network, and most importantly for Cardano users, it will enable users who took part in the Glacier airdrop to claim their tokens.
All this is a good thing for Cardano and it’s ecosystem. However, recent data shows that most recently launched projects don’t perform as well as expected.
Some of the most notable ones are Monad, Keeta, Plasma, and Somnia. While these projects launched with a lot of hype, their performance has deteriorated, with their tokens trading at or near their all-time lows.
Additionally, there is a risk that investors will sell the news after the Midnight launch. This is a situation where investors buy an asset before a major event and then sell it when it happens.
Source: https://coingape.com/markets/is-cardano-price-at-risk-of-a-50-crash-ahead-of-the-midnight-launch/
