On September 22, the long-awaited Vasil update from Cardano (ADA) was published, which promises to make the blockchain more scalable and cheaper than before. However, this failed to create bullish momentum for the ADA market.
prevents the sale of Cardano news
The price of ADA has fallen by about 9.5% since the update and was $0.43 on September 26th. The fall in the ADA/USD pair was accompanied by a rejection candle on the daily price chart, as evidenced by a brief rally to $0.48 on the day. What a fork and a sharp correction after.
Daily ADA/USD price chart. Source: TradingView
The low-key reaction of ADA bulls to the successful Vasil upgrade is similar to what happened in the Ethereum (ETH) market after the Ethereum merger.
In other words, buying on rumors, selling on news, similar to most previous Cardano hard forks that have a past history of falling ADA prices as shown below.
Three-day ADA/USD chart. Source: TradingView
In addition, macro risks led by a very hawkish Fed have weighed on the post-Vasil bullish ADA outlook.
The decision by the US Federal Reserve to raise benchmark interest rates by another 0.75% was made 48 hours before the Cardano update. In response, ADA coincided with risky assets given the continued positive correlation with equities through 2022.
As of September 26, the correlation coefficient between the Cardano token and the Nasdaq token was 0.83.
Daily correlation coefficient for ADA/USD and Nasdaq. Source: TradingView
Eye accident rate ADA 40%
At the same time, ADA technical indicators draw a bearish triangle pattern with a bearish outlook for the near term.
RELATED: Charles Hoskinson and ETH developer engage in war of words after Vasil promotion
Theoretically, a descending triangle in a downtrend acts as a bearish continuation signal, meaning it recovers after the price decisively breaks the support trendline. In this case, the price decreases with the maximum height of the triangle.
A three-day ADA/USD price chart with a descending triangle splitting. Source: TradingView
As such, any break below the $0.41 ADA triangle support could send the price down to $0.25. In other words, a price cut of 40% by the end of 2022.