Crypto Market Review, August 25

While most cryptocurrencies in the market are looking for a bounce foundation underneath, Cardano has reached the fundamental level of the 200-week moving average against Bitcoin, which forms the green price light after yesterday’s 13% drop. Unfortunately, the price development against the USD leaves much to be desired.

Cardano reaches fundamental support

Despite the lock-in on the USD pair, Cardano is showing some bounce potential against Bitcoin, which has clearly not shown any strength in the market in recent weeks.

As the daily chart of assets and chain data suggests, Cardano has more chances for a short-term return than most cryptocurrencies on the market. In terms of technical analysis, ADA has reached the local support of the 200-week moving average, which previously served as a bounce foundation.

ADA entered the 50- and 200-week moving averages back on June 13 and has been moving there for the past nine weeks, which can be considered a consolidation. As mentioned on U.Today before, Cardano is less likely to face another price drop compared to similar cryptocurrencies.

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The MVRV ratio for ADA is at a lower level compared to Ethereum, Solana and others. The reason behind it is the problematic price performance of the assets caused by technical problems on the test network of the network that questioned the stability of the main network after the final implementation of Vasil.

Currently, we can see a gradually decreasing trading volume, which can be considered both positive and negative factors; the drop in volume is useful when whales or any kind of investors try to pull assets from the downtrend, but at the same time it leads to a decrease in liquidity.

Bitcoin’s fall continues

Since the crash on August 18th, Bitcoin has shown us zero signs of an upcoming reversal as technical, chain and fundamental factors are showing against the first cryptocurrency. We have previously mentioned on U.Today that the profitability for long-term holders delivers is at an extremely low level.

As the profitability of digital gold does not recover, we may see an upcoming reallocation of funds and prolonged consolidation. Until the profitability of the asset recovers, there is little chance of a reversal as investors are less likely to invest more in the already troubled asset.

From a macroeconomic point of view, the situation has not changed as the rate hike cycles continue and the US dollar breaks new highs almost every day, approaching the aforementioned 2002 high.

The only event that could change the balance of the market is the Merge update on Ethereum, which is expected to add more volatility to Ethereum. Considering Ether’s dominance in terms of derivatives volume, the performance of the second largest cryptocurrency on the market will most likely affect Bitcoin and other digital assets.