Cryptocurrency Market Analysis, January 5th

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Arman Shirinyan

Cardano slowly loses its grip on the market as the bulls give up

Contents

  • The rally fade followed by the volume
  • The Surprising Rise of Ethereum PoW

The fuel of the New Year’s market recovery appears to be evaporating as most assets are starting to lose much of their value despite some signs of recovery a few days ago. The most recent crash occurred on Cardano, which appears to be trying to enter a new uptrend.

The rally fade followed by the volume

According to Cardano’s daily chart, the Ethereum competitor is gradually losing much of the momentum it gained earlier in the year. Unfortunately, the trading volume, which has dropped by more than $70 million in the past 24 hours, suggests that major traders are not yet ready to support the asset’s upward move.

Cardan graph
Source: TradingView

Despite the more recent NFT controversy in the Cardano community, the reason behind the deceleration of the rally is more vague. Cardano has mostly been following the general sentiment on the cryptocurrency market and the most recent drawdown is only part of the overall correction on the cryptocurrency market.

At press time, we are seeing a continued weakening of Cardano’s recovery, which makes us think about the next resistance levels that investors could use as position average points. If the existing trend prevails today, then ADA will most likely drop below the $0.24 local support level and reach a new local low.

The guideline for the current downtrend is reflected in the 21 day EMA. It often serves as a tool for determining local reversal points and breakouts.

The Surprising Rise of Ethereum PoW

The last thing most cryptocurrency market participants expected was the sudden rise of a PoW version of Ethereum that has been truly silent after the Merge update was rolled out on the mainnet.

However, over the past seven days, ETHPoW has shown a solid performance in the market, gaining more than 5.7% of its value in the last 24 hours and more than 10% in the last week. The existing trend in the market could be the result of an underperforming Ethereum network that has recently reached an unfortunate threshold: the surplus of emissions from the merger has reached 5,000 ETH.

The lack of network activity has been directly linked to the decrease in the intensity of fire operations. Despite the slow recovery in network usage, the Ethereum we know today is far from the 2021 version of the same network that was on the verge of becoming unusable due to high transaction and operational costs.

Ethereum PoW, on the other hand, is considered a strong alternative to the PoS network and even highlighted as a more resilient version of Ethereum due to the conservative mechanism behind it. As of press time, the capitalization of Ether’s big brother is $335 million, while the coin itself is trading at $3.3 in the market today, compared to $1,253 for Ethereum.

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