Cardano bulls run out of steam after Vasil hard fork — 40% ADA price crash in play

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Cardano’s (ADA) long-awaited Vasil update went live on Sept. 22, which promises to make its blockchain more scalable and cheaper than before. However, this has failed to bring bullish momentum to the ADA market.

Sell-the-news hampers Cardano

ADA’s price has dropped by approximately 9.5% since the update and was changing hands for $0.43 on Sept. 26. The ADA/USD pair’s drop was accompanied by a rejection candlestick on its daily price chart, confirmed by a brief rally to $0.48 on the day of the fork and a sharp correction thereafter.

ADA/USD daily price chart. Source: TradingView

ADA bulls’ muted reaction to the successful Vasil update is similar to what transpired across the Ether (ETH) market after Ethereum’s Merge.

In other words, a buy the rumor, sell the news occasion, resembling most of Cardano’s earlier laborious forks, which have a historical past of previous ADA worth crashes, as proven beneath.

ADA/USD three-day worth chart. Supply: TradingView

As well as, macro dangers led by a really hawkish Federal Reserve additionally weighed down ADA’s bullish expectations post-Vasil.

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The U.S. central financial institution’s choice to raise its benchmark rates by one other 0.75% got here inside 48 hours earlier than the Cardano replace. ADA fell alongside risk-on belongings in response, given its constant optimistic correlation with shares all through 2022.

As of Sept. 26, the correlation coefficient between the Cardano token and the Nasdaq Composite was 0.83.

ADA/USD and Nasdaq every day correlation coefficient. Supply: TradingView

ADA worth eyes 40% crash

In the meantime, ADA’s technicals are portray a descending triangle sample for a bearish outlook within the close to time period.

Associated: Charles Hoskinson and ETH dev get into a war of words post-Vasil upgrade

Theoretically, a descending triangle in a downtrend acts as a bearish continuation sign, that means it resolves after the worth breaks beneath its help trendline decisively. In doing so, the worth falls by as a lot as the utmost triangle top.

ADA/USD three-day worth chart that includes descending triangle breakdown setup. Supply: TradingView

Subsequently, a breakdown beneath ADA’s triangle help of $0.41 might have its worth crash towards $0.25. In different phrases, a 40% worth decline by the tip of 2022.

The views and opinions expressed listed below are solely these of the writer and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer includes threat, you must conduct your personal analysis when making a choice.