- Bulls must not place too much faith in the news hype.
- The falling wedge breakout can see an 80% rally from $0.4.
Cardano [ADA] is set to post triple-digit gains next month if historical trends repeat themselves. IntoTheBlock observed in a post on X (formerly Twitter) that the blockchain has been preparing for the Chang Hard Fork.
Reportedly, the price went up 130% from $1.35 to $3.1 during the previous hard fork, the Alonzo hard fork of August 2021. Since then, the blockchain has had two other hard forks with varying degrees of market impact.
Not an automatic 100% price gain
The previous Cardano hard fork was the Valentine upgrade, which went live on the 14th of February, 2023. Coming in the depths of the bear market, it gave ADA holders a lukewarm 16.9% gain over two days.
Thereafter, the price plunged from $0.42 to $0.315, a 28.5% drop in three weeks. Therefore, a hard fork does not automatically guarantee a price doubling.
Other factors such as market-wide sentiment and the impact of the individual upgrade also matter.
The hard fork before that, coming after Alonzo, was the Vasil one in September 2022. This saw an 11.1% price gain over two days before the downtrend was re-established.
Will the Chang hard fork live up to expectations?
Source: ADA/USDT on TradingView
The 1-week chart of ADA showed that a falling wedge formation has been forming since December 2023. The preparation of the past seven months saw a breakout above the descending trendline last week.
From a technical perspective, this was great news for the bulls. A move toward the wedge’s highs at $0.72-$0.78 could commence over the coming months, marking a near 80% price gain.
It must be noted that the trading volume has been declining. Consequently, the OBV has trended downward, taking away from bullish expectations.
Source: Santiment
The daily active addresses have remained relatively stable since late April. The relative sparsity of engagement could be an explanation for the reduced demand.
The development activity has steadily increased since February, which should give long-term holders confidence.
Source: Santiment
Concerningly, while prices broke out of the wedge pattern, the mean coin age fell dramatically. This signaled a distribution phase for Cardano.
The Chang hard fork might not see triple-digit percentage gains without the bullish conviction of holders.
Read Cardano’s [ADA] Price Prediction 2024-25
The 90-day MVRV ratio was slightly negative, showing the average holder in this period was at a minor loss.
Overall, the metrics did not signal buying opportunities or continued bullish dominance. The buy volume has to increase consistently to undo the OBV’s trend and establish a sizeable rally.
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