Cardano (ADA) has reached a new all-time high, but probably it is not the best moment to invest in this cryptocurrency
Cardano was one of the best performers on the cryptocurrency market last several days, and the price of this cryptocurrency has reached a new all-time high above $2. The current price stands around $2.13, and if you decide to trade Cardano (ADA), you should always use a “stop-loss” order because the risk remains high.
Fundamental analysis: The current price appreciation has a less fundamental background
Cardano has exploded since the beginning of May, and this cryptocurrency continues to trade in a bull market. The daily volume of ADA remains high, but the current price appreciation has a less fundamental background.
“Cardano is overvalued, the market is always forward-looking, and the current price is based on anticipated future value, but more than that, I think if we’re going, being honest here, the current price of Cardano is riding pretty high on hype versus actual demand for the token based on utility and necessity by developers and users and stuff like that,” said Crypto trader and influencer Lark Davis.
The cryptocurrency market remains under pressure, and most cryptocurrencies’ prices went down to their lowest levels in months. From its peak of around $64,895, Bitcoin is currently down more than 20%, which indicates that it has entered a bear market.
The cryptocurrency market is losing its value this week, the price of Cardano can easily back below $1.8 level, and maybe it is not the best moment to invest in this cryptocurrency. If bigger investors unexpectedly sell a substantial amount of Cardano, it could result in an extreme correction as a small price change could provoke liquidations from traders with high leverage.
Technical analysis: $2 represents a strong support level
This cryptocurrency has made a big jump in a short period and, if you decide to buy Cardano ADA/USD, you should consider that the price could also weaken from the current levels. It is also important to mention that the price of Cardano is usually correlated with the price of Bitcoin, and investors in this cryptocurrency should also have Bitcoin on their “watch list.”
Data source: tradingview.com
Cardano (ADA) is currently trading around $2.13 level, but it would be a strong sell signal if the price falls below $2 support. The next price target could be around $1.8 or even $1.5; still, if the price falls jumps above $2.30, we have the open way to $2.50.
Cardano has reached a new all-time high above $2, but probably it is not the best moment to invest in this cryptocurrency. Crypto trader Lark Davis said that Cardano is overvalued, and the current price appreciation has a less fundamental background. For now, there is no risk of the bear market, but if the price falls below $2 support, it would be a strong “sell” signal.