The Cardano price remains under intense pressure as the buy the rumour, sell the news situation gets underway. The ADA token is trading at $2.37, which is about 23% below its all-time high. The total market capitalization has tumbled from more than $90 billion to the current $77 billion.
Buy the rumor, sell the news
Buy the rumour, sell the news is a common statement in the financial market. It essentially means that investors tend to buy an asset ahead of an expected event and then sell when it is confirmed.
We have seen this situation several times in cryptocurrencies. For example, a few months ago, the price of Dogecoin surged ahead of Elon Musk’s appearance in SNL and then crashed afterwards.
Similarly, many cryptocurrencies rallied ahead of Coinbase’s direct listing and then retreated after that. Most recently, the Bitcoin price fell by double-digits after El Salvador made it a legal tender.
Cardano is having a similar situation. The ADA price jumped by more than 200% between July and September as investors waited for the London hard fork. This hard fork led to the introduction of smart contracts to Cardano’s network.
The smart contracts capability is a game-changer in blockchain technology because it is the technology that enables developers to build decentralised applications (DAPPs). Some of the cryptocurrency apps that are built using the technology are in the DeFi, non-fungible-tokens (NFT), and gaming industries.
Developers are hard at work using Cardano’s technology. There are about 200 smart contract projects already listed in Cardano’s explorer platform. Another app, Vercel App, puts the number to more than 2,200.
Still, there is one potential catalyst for the Cardano price. The foundation will host the Cardano Annual Summit on September 25. This event will feature representatives from the foundation and developers from around the world. In most cases, cryptocurrency prices tend to rally ahead of such an event.
Cardano price prediction
In my recent ADA price prediction, I noted that the platform was facing its biggest test ever. I also predicted that the coin would likely continue with the downward trend with the next key target being at $2.
This thesis has worked out nicely although the price is slightly above $2. A closer look at the four-hour chart shows that it has found a lot of support at $2.3163. It has struggled to move below this level several times before. It is also slightly above the 38.2% Fibonacci retracement level.
It has also formed a head and shoulders pattern whose neckline is at $2.3163. Therefore, there is a likelihood that the coin will break out lower to about $2. Still, the upcoming event could save the day.
