A widely followed crypto analyst says that smart contract platform Cardano (ADA) is likely entering into a “depression” phase that could see its price dip significantly.
In a new strategy session, crypto analyst Benjamin Cowen tells his 786,000 YouTube subscribers that the Ethereum (ETH) competitor will likely go into a deeper correction period and reach its bear market bottom at much lower prices.
Cowen compares ADA to the trends of the Nasdaq in 2002-2003 to demonstrate that even after a large price drop and extended bear market, price could still suddenly plunge dramatically further after being rejected from the 50 week moving average.
“From the last ditch effort by the Bulls at the 50 week [moving average], the [Nasdaq] dropped 50%. What would that mean for ADA? From this level, $0.37, so not $0.26, which is what we are right now, but from $0.37 cents, what would a 49% to 50% drop look like? That would put ADA below $0.20.
You could measure this in other ways as well. Instead of taking it from that point you could measure it from [an even lower low], and that was the penultimate low to the final low, [which] was a 27% drop. A 27% drop from this low would put [ADA] all the way down at $0.16, which is coincidentally also a somewhat important level, the level that ADA made it back to in August 2020.”
While not picking specific targets, Cowen outlines potential levels of $0.17, $0.12, or $0.07 for Cardano to find its bottom.
“There’s also some other important levels in here, you also have that $0.11 level at the 2019 high, and then of course you also have the pre-pandemic high that’s really far down and that’s only at around $0.07 or $0.08. I’ll be the first to tell you if we go into the depression phase, I have no idea how low it goes, absolutely no idea…
So the more important part here is to consider, is this the beginning? Are we about to enter into the depression phase? We just had several red weeks in a row, we always could pop back up for another couple of weeks just to make it so that people YOLO in one last time, but there is a real risk here and I just think that people should be aware of it now.”