The Cardano (ADA/USD) price has nosedived to an important support level as profit-taking resumes. The coin dropped to $2.47, which is about 15% below the highest point this week. ADA has a market capitalization of more than $81.5 billion, making it the third biggest cryptocurrency after Bitcoin and Ethereum.
Cardano is a blockchain project that was started by Charles Hoskinson to tackle some of the biggest challenges in sectors like retail, finance, education, and agriculture. The platform’s roadmap has five stages, including Byron, Shelley, Goguen, Basho, and Voltaire.
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Cardano’s developers are now working on the Goguen era, which will introduce the smart contracts technology. For starters, smart contracts is the technology that enables the development of Decentralized Applications in platforms like Solana and Ethereum.
By launching the smart contracts technology, Cardano will help solve one of the biggest mysteries about its platform. Indeed, last month, Mike Novogratz, the influential cryptocurrency investor asked his Twitter followers to show some of the projects built on Cardano.
Still, there is no evidence that developers will shift to Cardano’s ecosystem. Besides, many of the existing projects like Solana, Hadera Hashgraph, Ethereum, and Polkadot work relatively well.
The Cardano price is also retreating as sentiment in the cryptocurrency industry wanes. Indeed, after soaring to more than $50,000 this week, the price of Bitcoin has dropped to slightly above $48,000. At the same time, Ethereum has declined to about $3,100 while the total market capitalization of all cryptocurrencies tracked by CoinMarketCap has dropped to more than $2 trillion.
Analysts are watching at the ongoing Jackson Hole summit for any information about interest rates and tapering of asset purchases by central banks. So, what next for the ADA price?
The daily chart shows that the Cardano price has rebounded recently. Indeed, at its peak this week, the coin was up by more than 200% from its lowest level in July. Along the way, the coin formed a cup and handle pattern that is shown in red.This week, ADA price moved above the upper side of the cup pattern. Now, it has dropped and retested this level. In price action analysis, this is usually known as a break and retest approach, meaning that the coin will likely resume the bullish trend. This is evidenced by the fact that it has moved above the 25-day and 50-day moving averages.
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