Cardano retests key support amid bearish sentiment and testnet concerns

Cardano retests key support amid bearish sentiment and testnet concerns

By Motiur Rahman - min read
  • ADA has dipped 3% in the past day.

  • Reports of a bug in one of Cardano’s testnets likely to delay Vasil upgrade.

  • Technical indicators are looking bearish below the $0.56 resistance level.

Cardano’s ADA/USD has dropped 3% in the past day, increasing weekly losses to 19%. Its market capitalization is down to $15,218,450,837 with lower trading volumes. ADA trading volumes reduced by 8% to slightly above $650 million in the past day.

The bearish momentum in Cardano is partly linked to the ongoing crypto market correction. Aside from the correction, an important fundamental aspect has shaken the smart contract blockchain. A bug reported in its testnet could delay the anticipated Vasil hard fork.

Cardano’s founder Charles Hoskinson has refuted the claims, which termed the testnet ‘catastrophically broken’. Hoskinson said that the bug had already been solved in a previous update and was not a major issue. He maintains that the concerns could unnecessarily delay the hard fork.

Vasil upgrade is expected to introduce major updates on Cardano. Some benefits include enhanced throughput speed and reduced latency of block transmission. However, there have been multiple delays, with the latest being in July. The delays are causing a subdued performance in ADA, as shown in the daily chart below.

ADA retests $0.4 support

Source: TradingView

According to the technical chart above, ADA has retested the $0.43 support level. The level has been retested several times since mid-May. Overall, the token has remained subdued at under $0.56 for the past three months.

The technical indicators are not looking bullish either. MACD histograms are red, with the trend following lines crossing close to the neutral point. The Stochastic Oscillator is at the lowest point since July 13.

At 11, the momentum indicator is at the oversold zone and could be due for a bounce back. However, with the momentum being bearish, the token must flip $0.56 to welcome any bullish sentiment.

Concluding thoughts

ADA has retested a key support level. The technical and fundamentals are pointing to more bearish pressure. A bullish momentum can only be possible past the $0.56 resistance.