Cardano’s price has entered the saturation zone, which indicates the possibility of price correction in the future.
to the Report Coin Telegraph, Cardano’s price on Monday managed to record a new historical peak. Investors and traders hope that launching smart contracts to improve the advancement of this digital currency will lead to more acceptance and, consequently, more leaps in this digital currency.
Each Cardano unit is currently trading in the $ 2.9 range and has experienced a 3% price increase over the past 24 hours.
PostyXBT, a market analyst, says Cardano has been in the price discovery phase for some time. David Gokheshtein says Cardano’s uptrend is likely to continue until September 12. September 12 Smart contract support will be added to the Cardano network during the Alonso update.
By implementing the Alonzo update, developers can use smart contracts in the Cardano ecosystem using the Plutus programming language. Plutus is currently available for testing, and developers can use it to develop Blockchain software.
Experts predict that after attracting developers to Cardano, the acceptance of Cardano tokens will increase. With the support of smart contracts, it will be possible to benefit from services such as decentralized finance (DeFi) in Cardano.
Cardano’s technical indicators of the market predict that we will see a shock in the short term. This shock may correct the price of this digital currency. It should not be forgotten that this correction may lead to a 40% drop in the price of Cardano. However, Cardano’s uptrend will remain unchanged.
The Relative Strength Index (RSI) in the daily timeframe is in the range of 83 and buy saturation. According to traders, when this index is higher than 70, it indicates that the price of an asset is higher than its real value; Therefore, many of them will seek to maximize profits and liquidate their assets.
For example, in the first quarter of this year, Cardano’s price jumped sharply, pushing the relative strength index above 90. Shortly afterwards, Cardano began recording transverse oscillations. At that time, the 50-day moving average (EMA50) acted as support.
Cardano has experienced a 114% price increase since the beginning of this month. Since the beginning of 2021, this digital currency has added 1.511% to its price. On the other hand, when the relative strength index is in the sales saturation range, the opposite scenario occurs. If the fractal of the first quarter of 2021 happens again, we may see a fall to support the 50-day moving average. This moving average is at $ 1.73; This means that in order to achieve this support, Cardano must lose about 40% of its value.
As we have said before, such a correction will not necessarily stop Cardano’s uptrend in the long run. Given Alonso’s potential for success, there is likely to be a further jump in Cardano’s price. Cardano is expected to remain in the price discovery phase.