Cardano (ADA) price has recently been in the spotlight, and not all the attention has been positive. In simple terms, the ADA price is declining due to increased selling pressure. One contributing factor to this trend is a significant withdrawal of Cardano from smart contracts. Nonetheless, the altcoin still holds substantial growth potential, with optimistic developments anticipated for its network.
According to a recent video by Crypto Capital Venture, Cardano has encountered resistance at the 20-day and 50-day moving averages, currently situated around 26-27 cents. A potential breakthrough above these levels could signal a shift towards a bullish trend.
Taking a broader perspective and examining the weekly chart, it becomes apparent that Cardano is presently testing the 20-week moving average. In the realm of cryptocurrency, surpassing this moving average is a noteworthy milestone, often indicating a transition from a bear market to a bull market.
During bear markets, altcoins like Cardano often underperform. Nevertheless, the key takeaway is that Cardano remains in line with its previous market cycle. The ultimate aim is to eventually surpass the 20-week moving average, although this achievement may require some time.
Data from DeFiLlama recently revealed a decline in the total ADA held in smart contracts, decreasing from over 770 million on September 2 to approximately 730 million on September 11. This equates to around 40 million ADA being withdrawn from these contracts. Such a significant influx of ADA into the market, particularly during periods of low trading activity, can exert downward pressure on its price.
Cardano did encounter some setbacks with its smart contract functionality, impacting both its growth and token value. However, the project is actively working to address these issues. They have introduced Hydra as a solution to accommodate more transactions and have also streamlined the process for ordinary individuals to create smart contracts.
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