Analyst highlights that Cardano should not continue its bullish rally2 min read
Cardano (ADA), one of the biggest highlights in the crypto market in the middle of last year, has slipped out of the spotlight after a nearly 50% correction helped to eliminate the hype surrounding the cryptocurrency.
However, at the beginning of 2022, Cardano once again caught the attention of traders after it started a movement and recovery in its value while BTC and the main cryptocurrencies in the market were down.
However, for cryptocurrency analyst Benjamin Cowen, a handful of factors could prevent ADA from starting a bull run now.
Cowen highlighted that BTC is the “number one” limiting factor that could keep the ADA price from going higher.
According to the analyst, BTC controls the health of the market. Therefore, as long as its price remains bearish, it will be difficult for ADA to completely counter this trend.
Additionally, Cowen noted that the ADA’s “bull market support band” ranges from $1.64 to $1.81. The bull market support band is a technical indicator that combines the 20-week simple moving average (SMA) and the 21-week exponential moving average (EMA).
“Can you look at this [US$ 1,81] as a short-term resistance”, he said.
As Cowen pointed out, it is not just ADA that relies on BTC for a bullish rally, but all altcoins.
The Cardano smart contract platform has several projects in the works for 2022. Recently, Input Output Hong Kong (IOHK), which is in charge of the project, presented plans to scale the network this year.
Actions include implementing sidechains. These are separate blockchains connected to the main chain to allow the transfer of goods between them.
IOHK CEO Charles Hoskinson also outlined a number of different developments that will be completed this year. According to him, this will allow Cardano to match the technical elements of other leading smart contract platforms.
In this regard, Cowen cautioned traders to follow the success of these planned updates.
“Do they leave without any problems? I would encourage people to temper their short-term expectations. Like anything, when you have something coming out, there will be obstacles along the way.”