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Over the past two weeks, Cardano experienced a powerful rise reaching a new all-time high and the subsequent drop by 15% to a local low. At the same time, the on-chain activity of the coin continued to remain at a high level, indicating the market's interest. In addition to the encouraging environment for growth, demand for the asset increased significantly because of the Alonzo hard fork, which was completed on September 12.
The update was successfully launched on the network after several months of testing. The main goal of the Alonzo hard fork was to introduce Plutus-powered smart contract scripts. In addition, the update includes the ability to create and develop decentralized applications. In other words, Cardano is officially becoming Etherium's rival in terms of creating decentralized finance (DeFi) applications. Time will tell how efficient the new Cardano network will be. However, in the near future, it will be possible to say whether Cardano will become a real contender for a piece of the pie, which belonged entirely to ETH. Developers are asking not to rush into the development of large DeFi projects, as the ADA ecosystem needs some time to optimize all processes. Cardano could lose in reputation and quotes if multiple DeFi projects are launched simultaneously.
Recently, a similar situation occurred in the run-up to the market crash, when platform users faced the inability to make transactions on the test network. Rumors about the incompatibility of ADA and smart contracts managed to accelerate the fall of the coin to local lows. In this respect, the project lacks sustainability, and its community cannot be called reliable. At the same time, the developers have already warned that decentralized applications will cause problems even after some time and you just have to accept it. These risks will be directly reflected in Cardano's quotations, so one should be concerned about the ADA's sharp upsurges and closely watch the news.
The successful hard fork launch has barely affected Cardano's price. Over the past 24 hours, the asset has fallen in price by 8%. At 2:00 p.m., it is trading at $2.4, which is the key level for the whole current uptrend. The coin has a $77 billion market cap and daily trading volumes hover around $7 billion. Despite the positive price trend, the ADA is unlikely to make a robust breakthrough in the near future. Despite the promising price trend, the ADA is unlikely to make a robust breakthrough in the near future. The full implementation of the Alonzo hard fork will take a long time, as the coin will have to overcome several resistance levels before it resumes its growth.
Currently, the cryptocurrency is considering bailout options, as there are enough coins left on exchanges after the sell-off that are pushing the price. The altcoin was about to close below $2.4, which could become a signal for a further sell-off. Given that even after the successful hard fork update, buyers are not rushing to redeem current volumes, the market is preparing to go short. The technical charts also confirm the existing uncertainty, which is reflected in the downward trend. The RSI is moving along the 30 and the MACD continues its downtrend. At the same time, the stochastic indicates the upcoming bullish momentum, which is unlikely to happen at current trading volumes. A similar pattern can be seen on the four-hour chart, which draws a line under the asset's plans to climb on September 13. The main goal for the cryptocurrency will be to close above the main support level in order not to trigger a new local sell-off.
On the daily chart, the situation is similar and the indicators show the bearish trend. The RSI continues to fall to 40, and the stochastic and MACD show a bullish divergence, which is also a bearish signal. The ADA/USD pair will continue its flat channel with attempts to break the uptrend line. It is likely that the situation will improve due to the proper functioning of smart contract protocols. However, it is likely that the market will start buying back volumes sooner if the ADA does close below $2.4.
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