Cardano (ADA) price analysis 30 Dec: Does risk-reward ratio appeal?

ADA may drop to $1.05, but will buyers rush in to support and bring a relief rally?

Representation of a golden ADA coin                                 
ADA price analysis – Photo: Shutterstock
                                

Cardano’s ADA token reached $3.10 in September, but has been in a strong corrective phase since then, dropping by more than 55%. Even after the fall, however, ADA has risen more than sevenfold in 2021.

Frederik Gregaard, CEO of Cardano Foundation, said in a blog post entitled ‘2021: A year of incredible growth’ that the year had witnessed “sustained growth, technical innovation, community expansion and partnerships”.

Among the major highlights, according to Gregaard, were that Cardano had “over 2.5 million native assets, with more than two million of these being non-fungible tokens (NFTs).” In addition, the network has seen sharp growth, with more than “23 million transactions in December”.

For 2022, Charles Hoskinson, founder and chief executive of Input Output Hong Kong (IOHK), who is also leading the research, design and development of Cardano, said in a YouTube video that he wants to empower people across Africa by facilitating affordable loans to the poor via decentralised finance.

“My goal for the second half of 2022 is to figure out how to put all the pieces together to get an end-to-end microfinance transaction on Cardano,” said Hoskinson.

However, in its 2021 summary, Arcane Research forecasts that Cardano may “fall out of the top 10 cryptocurrencies by market capitalisation” in 2022.

Could strong fundamentals boost Cardano’s price in 2022, or will it underperform other major coins? Will ADA go up? Read the ADA price analysis below to find out what the charts suggest.

Cardano technical analysis: weekly chart

A red and green line chart showing the price of Cardano
Cardano technical price analysis (weekly), 30 December 2021 – Credit: Currency.com

ADA’s price has been correcting in a descending channel. The bulls are attempting to defend the $1.20 level, but a minor negative is that they’ve not been able to sustain the recovery. This suggests that the bears could continue to sell on rallies.

If the price slips below the $1.20 support, the decline could extend to $1.05, where buyers could step in and arrest the decline. The first sign of strength will be a break and close above the resistance line of the channel.

Such a move will indicate that the downtrend could be over. The pair could then start an upward move towards a strong resistance at $2.30.

Conversely, a break and close below the support line of the channel could intensify selling, and the pair could drop to $0.80.

Cardano: Buy or sell at current levels?

A red and green line chart showing the price of Cardano
Cardano technical price analysis (daily), 30 December 2021 – Credit: Currency.com

Cardano’s price analysis suggests that the bulls are likely to defend the $1.05 support with all their might and that may start a relief rally, which could reach the channel’s resistance line. A break and close above the channel will signal that the downtrend could be over. This positive view will invalidate if the price breaks and sustains below $1.

Whatever the outcome might be, your decision to trade depends on your attitude to risk, your expertise in this market, the spread of your investment portfolio and how comfortable you are about losing money. This analysis does not constitute investment advice. It’s important to make your own analysis before deciding to invest. You should never invest more than you can afford to lose.

Cardano to US Dollar
Daily change
1.35349
Low: 1.31389
High: 1.36702

Further reading

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