Crypto analyst Benjamin Cowen says a handful of factors could prevent Cardano (ADA) from kicking off a bull run right now.
In a new YouTube update, Cowen tells his 692,000 subscribers that Bitcoin (BTC) is the “number one” limiting factor that could prohibit ADA’s price from surging higher.
The analyst explains that BTC controls the health of the market and while Bitcoin’s prices remain bearish, it will be hard for ADA to completely buck that trend.
ADA’s price surged from $1.19 a week ago to $1.61 at one point on Tuesday, though it has decreased back to $1.43 at time of writing.
Cowen notes ADA’s “bull market support band” ranges from $1.64 to $1.81. The bull market support band is a technical indicator that’s a combination of the 20-week simple moving average (SMA) and the 21-week exponential moving average (EMA).
Says the analyst,
“You can look at that [$1.81] as some short-term resistance.”
Smart contract platform Cardano has multiple projects in the works for 2022. Input Output Hong Kong (IOHK) recently laid out plans to scale the network this year, which include the implementation of sidechains, separate blockchains connected to the main chain to allow for the transfer of assets in between them.
IOHK CEO Charles Hoskinson also recently outlined several different developments that he says will be completed this year and will enable Cardano to match the technical elements of other leading smart contract platforms.
Cowen, however, warns traders to track how successful these planned upgrades actually are.
“Do they go off without a hitch? I would encourage people to temper their expectations in the short term.
Like anything, when you have something coming out, there are going to be bumps along the way.”
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