ADA’s Next Move: Expert Insights on Cardano
A well-known crypto strategist has suggested that Cardano (ADA) may be on the cusp of a significant downward move.
On the weekly chart, Benjamin Cowen cautioned about Cardano’s potential break below a critical support level. This support level has been repeatedly tested since December 2022, and in technical analysis, such frequent retesting tends to weaken support as buyer interest wanes.
Cowen’s perspective is that it’s challenging to envision Cardano remaining above the $0.240 support level for the entire year without making a definitive move. He anticipates a significant move before year-end, and he believes it will be a downward one.
According to this widely respected crypto analyst, Cardano’s anticipated decline can be attributed to a decrease in net liquidity. Cowen illustrates this connection with a chart demonstrating how ADA’s performance aligns with global net liquidity trends.
ADA is tracking changes in net liquidity, and it’s not surprising to observe altcoins performing this way, given the decline in net liquidity. Net liquidity, in this context, is defined as the balance sheets of various central banks, including those in the United States, Canada, the European Central Bank, the UK, China, Japan, Australia, New Zealand.
This analysis factors out the TGA (Treasury General Account) and the reverse repo.
READ MORE: Altcoin Liquidity Wanes as Market Appetite Fades
Regarding the potential shift to a bullish trend for Cardano and other altcoins, Cowen remarks that when liquidity rebounds, one can anticipate altcoins returning to higher levels, regressing toward the mean.
This is where substantial gains that many are seeking often materialize. Unfortunately, these gains are not typically realized in the pre-halving year, as the altcoin market tends to experience significant challenges. Therefore, when evaluating ADA/USD, it’s essential to keep in mind that the availability of excess liquidity largely influences it.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
