Cardano (ADA), one of the prominent cryptocurrencies on the world stage in 2023, fell from a high of US$0.46 to a low of close to US$0.22. A recent analysis by famous crypto strategist Benjamin Cowen suggests a possible sharp drop in the price of ADA by the end of this year.
According to the analyst, who has a YouTube channel, Cardano has repeatedly tested a crucial support level on its weekly chart. These frequent tests, since December 2022, point to a weakening of this support. For those familiar with the intricacies of technical analysis, it is known that when an asset constantly returns to a support point, the tendency is for that support to weaken, indicating a likely decline.
Cowen comments: “With current moves, it is almost inevitable that Cardano will not make a significant change. I anticipate a drop by the end of the year.” The cause of this predicted decline? The decrease in liquid liquidity, according to the expert. It shows data that indicates that ADA’s behavior is essentially tied to the flow of global liquid liquidity.
In this context, “net liquidity” refers to the balance of the central banks of various nations, including powers such as the United States, Canada, the European Central Bank, the United Kingdom, China, Japan, Australia and New Zealand. From this amount, values such as the Treasury General Account and the reverse agreement are subtracted.
The big question is: when will this storm pass, and will Cardano, along with other cryptocurrencies, show signs of recovery? Cowen is betting on a return of liquidity, at which point cryptocurrencies will again be able to demonstrate significant increases. However, it also signals that these gains are not common in years leading up to the halving.
Concluding, Cowen reinforces: “Analyzing the ADA/USD pair, it is crucial to remember that everything revolves around the liquidity available in the market”.
At the time of publication, the price of ADA was quoted at US$0.246968, up 0.5% in the last 24 hours.
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