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HomeAnalysisCardano's Price Plummets Ahead of Highly Anticipated Hard Fork, But Could This...

Cardano’s Price Plummets Ahead of Highly Anticipated Hard Fork, But Could This Be a Buying Opportunity?

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Cardano’s (ADA) price has taken a hit in the past 48 hours, dropping 1.5% to $0.35 on August 30, wiping out most of the gains made the day prior. This sudden decline is largely attributed to traders’ cautious mood ahead of the blockchain’s first hard fork in two years, known as the Chang hard fork.

The Chang hard fork, set to go live on September 1, will introduce on-chain governance to Cardano, allowing users to participate in voting on improvement proposals and future technical changes to the blockchain. This feature is already available on top rivals like Solana (SOL) and Ethereum (ETH), which could be contributing to ADA’s underperformance in 2024.

Despite the uncertainty surrounding the hard fork’s impact on ADA markets, the token has underperformed its blockchain rivals, dropping 45% year-to-date compared to Solana’s 26.75% and Ethereum’s 6.75% gains.

Technical analysis suggests that ADA is currently trapped in a falling wedge pattern, characterized by two descending trendlines and declining volumes. This pattern often results in a bullish reversal trend when the price breaks above the upper trendline and rises by as much as the maximum distance between the upper and lower trendlines.

If ADA breaks above the upper trendline, its upside target could reach the $0.47-0.65 range by October, depending on the breakout point. This could be a buying opportunity for investors who believe in the potential of Cardano’s on-chain governance feature to improve the network and increase demand for the token.

However, it’s essential to note that the falling wedge pattern is not a guarantee of a bullish reversal, and ADA’s price could continue to decline until it reaches the wedge’s apex point at around $0.26.

As the Chang hard fork approaches, investors will be closely watching ADA’s price action to gauge the impact of this significant network upgrade on the token’s value. Will Cardano’s on-chain governance feature be enough to turn the tide in favor of ADA, or will the token continue to underperform its rivals? Only time will tell.

Source: Cointelegraph

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