Crypto Market Review, January 5th

image of the article

Arman Shirinyan

Cardano is slowly losing its grip on the market as the bulls give up on their way up

Content

  • Rally’s disappearance followed by volume
  • The Surprising Rise of Ethereum PoW

The fuel for the market’s New Year’s recovery appears to be running out as most assets begin to lose much of their value despite some signs of recovery a few days ago. The latest breakdown occurred on Cardano, which appears to be trying to enter a new uptrend.

Rally’s disappearance followed by volume

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

Cardano chart
Source: TradingView

Despite the latest NFT controversy in the Cardano community, the reason for the slowdown in growth is more unclear. Cardano has mostly followed the general sentiment in the cryptocurrency market, and the latest reduction is just part of the general correction in the cryptocurrency market.

At press time, we see a continued weakening of Cardano’s recovery, which makes us think about upcoming resistance levels that investors could use as position averaging points. If the trend prevailing today prevails, ADA will most likely fall below the local support level of $0.24 and reach a new local low.

The direction for the current downtrend is reflected in the 21-day exponential moving average. It often acts as a tool to determine local reversal and breakout points.

The Surprising Rise of Ethereum PoW

The last thing most participants in the cryptocurrency market expected was a sudden surge in the PoW version of Ethereum that was really quiet after the implementation of the Merge update on the mainnet.

However, in the last seven days, ETHPoW has shown a solid performance in the market, gaining more than 5.7% on its value in the last 24 hours and more than 10% in the last week. The current trend in the market could be the result of the poor performance of the Ethereum network, which recently reached an unpleasant threshold: the excess issuance since the merger reached 5000 ETH.

The lack of network activity is directly related to the decreasing intensity of burning operations. Despite the slow recovery of network usage, Ethereum as we know it today is a far cry from the 2021 version of the same network that was on the verge of becoming unusable due to high transaction and operational fees.

Ethereum PoW, on the other hand, is considered a strong alternative to the PoS network and even stands out as a more resilient version of Ethereum thanks to the conservative mechanism at its core. At press time, the capitalization of Ether’s older sibling is $335 million, while the coin itself is trading at $3.3 on the market today, compared to Ethereum’s $1,253.

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