Cardano and Polygon have dropped by more than 4% over the past 36 hours.
Further selling pressure would increase the risk for these altcoins to drop another 50%.
ADA must reclaim $0.97 as support, and MATIC surge to $0.87 to invalidate the pessimistic outlook.
Share this article
The bloodbath in the cryptocurrency market may have no end in sight, and Cardano and Polygon are showing signs of weakness.
Cardano and Polygon On the Edge
Cardano’s ADA and Polygon’s MATIC appear to have entered a new downtrend as market conditions deteriorate.
Cardano suffered a brutal correction in the past 36 hours. It saw its price drop by more than 40%, going from a high of $0.66 to a recent low of $0.38. Even though ADA rebounded to reclaim $0.47 as support, it has room to drop further.
From a technical perspective, the recent downswing allowed Cardano to break out of a descending parallel channel that has developed on its daily chart since September 2021. The breach of the pattern’s lower boundary suggests that ADA has entered a steep 50% downtrend toward $0.28 or even $0.21.
A sustained daily close below $0.47 can serve as confirmation of the pessimistic outlook.
If Cardano can defend the $0.47 support level, a brief upswing to retest the channel’s lower boundary at $0.55 can be expected. But for the mid-term bearish thesis to be invalidated, ADA would have to print a daily close above $0.97.
Polygon’s MATIC is another altcoin that appears to have entered a new downtrend. The Layer 2 token recently broke out of an Adam & Even double top that developed on its three-day chart since May 2021.
The 49% correction that MATIC has seen over the past 36 hours allowed it to slice through the pattern’s valley floor at $0.62. Further selling pressure around the current price levels can result in a 78% retracement toward $0.13 or even $0.08.
MATIC would have to reclaim $0.87 to have a chance of invalidating the bearish outlook.
The cryptocurrency market continues to bleed after Layer 1 blockchain Terra entered meltdown mode this week due. UST lost its peg against the dollar, and it is currently worth just $0.46, while the network’s other token, LUNA, is trading at around $0.006. The world’s biggest stablecoin, Tether (USDT), also lost its peg early Thursday amid extreme market conditions, dropping to $0.95 and then recovering to $0.99.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
For more key market trends, subscribe to our YouTube channel and get weekly updates from our lead bitcoin analyst Nathan Batchelor.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.