Bitcoinโs potential rise to $10,000 against the ongoing Coronavirus frenzy may have been limited by one of its rival cryptocurrency projects.
Cardano, or ADA, surged by close to 10 percent against the benchmark cryptocurrency on Tuesday, registering a fresh top near 588 sats. The move pushed the ADA-to-BTC exchange rate to its eight-month high, also inching closer to a long-term technical resistance that kept the pair in an overstretched consolidation phase.
The wild upside swing followed CEO Charles Hoskinsonโs announcement of entering partnership PwC, a $42.4 billion global giant. The senior executive revealed that PwC could utilize Cardanoโs blockchain within its network of professional services, which includesย assurance, tax, and consulting to 420 out of 500 Fortune 500 companies.
Traders took cues from Mr. Hoskinsonโs announcement and started increasing their exposure in Cardano blockchainโs native asset, ADA, thereafter. As a result, the token registered fresh gains in both the US dollar and bitcoin markets.
Against the dollar, in particular, ADA surged by as much as 13.75 percent on a 24-hour adjusted timeframe (data from CoinMarketCap).
Cardano Technical Resistance
The latest push to the upside took ADA to test its long-term technical resistance โ the upper trendline of a slightly-ascending channel, as shown in the chart below.
Cardanoโs ADA testing a strong resistance level before it confirms a breakout | Source: TradingView.com, Binance
As of late, the ADA-to-BTC exchange rate was declining upon testing the greened upper trendline. The corrective mood showed tradersโ inclination to remain capped by technical levels despite solid fundamentals backing them. That said, even though Cardanoโs bullish move was spectacular, the cryptocurrency expressed its tendency to fall back.
Profit-taking at local tops could also be one of the key reasons why ADAโs intraday pump didnโt translate into a full-fledged breakout. Nevertheless, the cryptocurrency could likely benefit from a market-wide bullish scenario, driven partially by speculation over bitcoinโs role as a safe-haven against the fears of the Coronavirus outbreak.
Falling Wedge โ Another Bullish Case
Noted market analyst Crypto Rand indicated that Cardanoโs latest recovery was also a part of a technical breakout from a long-term Falling Wedge pattern.
In retrospect, the Falling Wedge technical indicator serves as a bullish scenario. Experts believe its formation during a downtrend eventually leads to solid upside breakouts. Crypto Rand shows that ADA has been in one like it lately, as shown in the chart below.
Cardanoโs breakout from a Falling Wedge pattern in play | Source: Crypto Rand
The technical indicator aims to send the ADA rate to the upper greened channel โ near $0.060.
With both technical and fundamental scenarios flashing a buying scenario, it is likely that Cardano is coming out from its overlong consolidation phase, registering a real recovery as it heads further into the year 2020.
