Cardano v1.4 Moves to the Testnet — Can the Bulls Bring ADA Back Above $0.03?

  • Cardano has recently moved the version 1.4 update to the testnet as the mainnet release draws closer.

  • The market is currently trading at support as the buyers continue to defend the $0.029 handle.

  • Support moving forward: $0.029, $0.027, $0.025, $0.02206, $0.020, $0.01952, $0.01489.

  • Resistance moving forward: $0.030, $0.03319, $0.03993, $0.045, $0.04705, $0.050, $0.052.

Latest Cardano News

In a tweet released on December 8 2018, Charles Hoskinson, CEO of the Cardano project, had announced that the latest update for the Cardano network, known as version 1.4, has entered the testnet phase of production.

The fact that it has moved to testnet shows that the release of the update is imminent, providing they do not run into any unforeseen problems on the testnet.

Developments are usually slow with a peer-reviewed academic research project such as Cardano but the process should usually result in a highly-optimized and peer-reviewed codebase that investors and developers can be confident with.

According to Hoskinson in a recent YouTube AMA, the v1.4 update has made major amendments to the codebase and created a new solution for the database that makes storage more efficient. He also went on to say that the majority of the updates after the v1.4 update will be mainly Project Shelly-related which aims to shift Cardano into a fully decentralized and autonomous network.

In other news for Cardano, the prepaid cards provided by Meta+, a Seoul-based fintech company, have officially integrated ADA into their platform as they start the release of their cards.

The prepaid cards will allow users to spend their ADA tokens at over 30,000 throughout merchants in South Korea including well-known convenience stores such as GS25 and Emart24.

The company has announced they already have over 200 preorders for their cards which can be a physical card or mobile-based, further expanding the use case for ADA in the Korean market.

Let us continue to take a look at the ADA market over the recent term and highlight any potential support and resistance zones moving forward.

Cardano Price Analysis

ADA/USD has seen a price decline totaling 3.22% over the past 24-hour period of trading, bringing the token price to a value of $0.0298, at the time of writing.

The cryptocurrency has undergone a rough 7-day trading period where the market has fallen by 23% and an even worse 30-day trading period where the market had fallen by over 60%.

Cardano is now ranked in 11th position and presently holds a total market cap value of around $775 million. The 14-month old cryptocurrency has now lost up to 97% of its value since placing its all-time high price earlier in the year.

Cardano Analysis

Taking a look at the market action from the short-term perspective above, we can see the precipitous decline during November 2018 when the market fell from a high above $0.08 to a low of around $0.034.

Price action has continued to decline even further during the first phase of December 2018 as ADA/USD drops below the $0.030 handle.

The market has found some support recently, provided by the medium-term downside 1.618 Fibonacci Extension level (drawn in red) priced at $0.02970. This level of support has caused the downtrend to stall as the bulls defend the area.

Trend: Bearish If the Market Closes Below $0.029

If the sellers within the market push and close price action below the support outlined at $0.02970, we can assume that the bearish trend will continue further lower.

Where is the Support for ADA/USD Below the $0.029 Handle?

In this scenario, if the sellers can break below $0.029, we can expect immediate significant support beneath to be located at the round number support handle at $0.025.

If the bears continue to penetrate below the $0.025 handle, further support beneath can be located at the short-term downside 1.272 and 1.414 Fibonacci Extension levels (drawn in green), priced at $0.02206 and $0.01952 respectively.

If the selling pressure causes price action to collapse even lower, then we can expect further support lower to be located at the long-term downside 1.618 Fibonacci Extension level (drawn in blue) priced at $0.01489.

What If ADA/USD Moves Above $0.03?

If the bulls can regroup and begin to push price action above the resistance at the $0.03 handle, we can expect immediate significant resistance above to be located at the previous medium-term downside 1.618 Fibonacci Extension level (drawn in turquoise) priced at $0.03319.

Further higher resistance above this that the buyers will need to break above are located at the recent 1.414 and 1.272 FIbonacci Extension levels (drawn in red), priced at $0.03993 and $0.04705 respectively.

What Are the Technical Indicators Reading?

The RSI technical indicator is currently still trading within the bearish territory as the sellers remain in control of the market momentum.

However, there is some ever so slight divergence between the RSI and price action which can possibly indicate that a serious reversal may be about to occur.

For an indication that the sellers have run out of energy, we would need to see the RSI head back toward the 50 handle with a break above confirming that the bulls have regained control of the market momentum.

Conclusion

Cardano’s development may run slower relative to other cryptocurrency projects; however, when the team does release updates, you can be more certain that the code has been academically or peer-reviewed and should, theoretically, be more robust than code that has not been peer-reviewed.

The $0.029 handle is now the next level to watch out for. If the market does break below, we can only assume that there is more damage to come as we head toward the next level of support around the $0.025 handle.

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