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Cardano (ADA) More Resilient Than Bitcoin (BTC) From Technical Perspective, Here's Why

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Tue, 31/01/2023 - 17:00
Cardano (ADA) More Resilient Than Bitcoin (BTC) From Technical Perspective, Here's Why
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The breakdown on some assets, including LDO, Bitcoin and Ethereum, is the first sign investors received in this short-term bull run on the market. But could it be the signal for a longer-term reversal that will send the market back to the prolonged downtrend, or is it just a temporary and necessary correction?

ADA still in uptrend

While other assets are either in correction or moving in stalemate, Cardano's coin has been steadily going up and has not broken the local uptrend, which puts it on a short list of assets that have been ascending on the market.

Cardano chart
Source: TradingView

Bitcoin, Ethereum and other assets are currently consolidating around their local highs, which could be a sign of a reversal in the foreseeable future. Unfortunately, Cardano's resilience was followed by a far more subtle price performance compared to Bitcoin's 40% in the past, as ADA has gained only 10% to its value since the beginning of the rally.

Lido sends message

The movement of LDO is not often considered a signal for the cryptocurrency market, but at the same time, it gives investors an important signal about the state of Ethereum staking. The price performance of LDO is directly tied to the amount of ETH that is staked on the network.

Whenever the network sees an influx of staked volume, LDO enters the local uptrend as the demand for the token rises, since many investors choose Lido Finance as their main tool of gaining liquidity while locking Ether in smart contracts.

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Yesterday, LDO broke down and fell below the local 21-day moving average, which usually acts as a signal line that gives us information about the strength of the existing trend. The move below it projects a shift in the staking trend, which became ascending at the beginning of the year.

However, apart from a stalemate in Ethereum staking, the price performance of LDO could also be a reflection of the rising competition in liquidity provision industry as more projects with business models similar to Lido's appear in the space, while offering way more flexible terms for investors.

Aptos' rally is fading

The massive liquidation volume at around $20 on Aptos led to the massive reversal of the token on the market as it lost almost 20% of its value almost immediately. All signs we see on it today show that the token might reverse in the foreseeable future and continue the downtrend or enter another stalemate. 

Aptos' trading volume has been slowly descending since the token reached the local high on Jan. 26, and it will most likely be the main reason behind the reversal as retail traders are massively closing their positions after a series of liquidations.

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