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Despite the broader downtrend momentum, Cardano still has the potential to present a solid opportunity for outsized gains.
Cardano ($ADA) is up 8% this week and is on track for its second consecutive weekly green candle if current momentum continues. However, this gain could prove modest relative to the asset’s broader upside potential once it breaks out of its ongoing corrective phase.
Key Points
- $ADA failed to follow the trajectory of Bitcoin in the just-concluded crypto cycle and barely met its $ATH of $3.10 halfway, peaking at $1.32.
- Cardano has shown strength around the key local support level of $0.22, with analysts suggesting there is little room for $ADA to drop further.
- Despite the broader downtrend momentum, Cardano still has the potential to present a solid opportunity for outsized gains.
- Everything hinges on Bitcoin, as its show of strength will make major altcoins start to look appealing.
- For price targets, Cardano could do an easy 3x-4x rally and potentially break to new ATHs if momentum is strong.
Cardano Has Underperformed
Zach Humphries, an analyst and builder of XT ALGO and CoinDuel AI, discussed the current state of Cardano in a recent market outlook. He stated the obvious, which is that Cardano has underperformed massively.
Notably, $ADA failed to follow Bitcoin’s trajectory in the just-concluded crypto cycle. While Bitcoin did not meet its usual standards, it still reached a new all-time high above $126,000, rallying 8x from its bear market lows.
In contrast, $ADA barely met its $ATH of $3.10 halfway, peaking at $1.32. Notably, although the broader altcoin market struggled, Cardano also underperformed comparable assets like Ethereum and XRP, which rallied to new all-time highs in the just-concluded bull run.
Further, $ADA did not match the trajectory of newer coins like Hyperliquid, losing its place as the 10th-largest cryptocurrency by market cap to the DEX platform’s native token after holding that position since 2017.
No Room for Further Cardano Dumps
Now, when the corrective phase kicked in, $ADA also dumped hard. The asset has quickly dropped to previous cycle bear market lows. For context, it reached a low of $0.2205 on February 6, a price level last seen in July 2023.
Meanwhile, Cardano has shown strength around this key local support, with analysts suggesting it has bottomed. Humphries shares a similar sentiment, noting that there is not much room for $ADA to drop further.
He also corrected the growing narrative that “Cardano is dead.” Despite emphasizing its underperformance, he believes the coin still presents an interesting trading opportunity for substantial gains. According to him, $ADA is shaping up to be a very solid trade.
Nonetheless, he sees Cardano not as a long-term hold but as an asset to time its entry properly and make quick gains. Not just $ADA, he noted that this is his disposition towards the broader altcoin market, as he sees Bitcoin as the only crypto to hold for the long term.
What Needs to Happen
Furthermore, the analyst noted that everything hinges on Bitcoin. If the apex cryptocurrency shows strength, major altcoins start to look appealing. Further northward drive for BTC expands liquidity for the broader market, benefiting other assets extensively.
Additionally, Humphries noted that Cardano and other smart-contract blockchains need a new narrative to drive adoption. For longevity, he stated that the $ADA ecosystem needs to find a big problem to solve. The analyst, however, remains upbeat about this happening, citing the network’s renowned security features.
If these factors align, Humphries believes $ADA would catch up to Bitcoin. He envisions the capital rotation not seen in the past cycle happening in the near term.
For price targets, he noted that Cardano could do an easy 3x-4x rally. This could push prices to a range between $0.84 and $1.12. If the market shows further strength, he predicted the coin could reach its current $ATH and enter uncharted territory.