Cardano Hard Fork to Boost ADA After Its 40% Dip?

Cardano (ADA) has disappointed its hardcore bulls so far in 2024, having crashed 40% year-to-date compared to the crypto market’s 30% rally in the same period. However, the cryptocurrency eyes a bullish revival with the growing buzz surrounding its upcoming Chang hard fork.

What is Chang Hard Fork, and Why Is It Boosting ADA’s Bullish Prospects?

The Chang hard fork aims to transform Cardano’s ownership structure, shifting control from the Cardano Foundation, EMURGO, and Input-Output Global (Hoskinson’s blockchain development company) to the community.

In doing so, the fork will make ADA, Cardano’s native token, a governance token, empowering holders to vote on blockchain changes. In his July 7 address, Cardano founder Charles Hoskinson said the upgraded node, tagged “node 9.0,” an essential component to the upcoming hard fork, is ready for release and will be rolled by July 15.

Since his livestream, ADA’s price has surged by over 14% to reach $0.363 on July 9, indicating growing speculation about an otherwise underperforming cryptocurrency losing its top ranking to a relatively new token like Toncoin (TON), as well as leading memecoin, Dogecoin (DOGE).

Blockchain analytics platform IntoTheBlock sees the ongoing speculation in the ADA market as reminiscent of the buzz ahead of its previous hard fork, dubbed “Mary,” in March 2021.

“It’s worth noting that before its previous hard fork in 2021, ADA surged 130%, from $1.35 to $3.10 in just a month,” the platform reminded.

Will Cardano Price Actually Boom After Chang Hard Fork?

Cardano is a relatively underbought cryptocurrency due to its 40% crash in 2024, a trend further visible in its declining dominance in the crypto market.

ADA’s market size has shrunk by over 50%, indicating significant capital rotation from Cardano to other cryptocurrencies. In contrast, TON, a rival blockchain project tied to Telegram, has surged in market dominance by over 75%, pushing Cardano out of the top 10 crypto assets.

Cardano’s depleting market share is reflected further in its holders’ growth in 2024. According to the on-chain data intelligence platform Santiment, ADA’s total amount of holders has been stagnant at around 4.48 million in the first half of 2024.

In comparison, TON’s holder count is lower, at around 25,800, but it has surged by approximately 190% in the same period.

Compared to its closest rival, the TON Blockchain, where the native token TON is already a governance token with potential exposure to Telegram’s 900 million users, ADA’s transition to a governance token via the Chang hard fork lags.

Cardano Technical Analysis: Falling Wedge Pattern Promises Some Growth

From a technical perspective, ADA’s price is expected to boom 5-20% in the coming days or weeks due to anticipations of a falling wedge breakout in July, as shown below.

Falling wedges are bullish reversal patterns characterized by two descending, converging trendlines. They resolve when the price breaks above the upper trendline and rises by as much as the maximum distance between the upper and the lower trendline.

As of July 9, ADA was attempting to close decisively above its wedge’s upper trendline to eye a run-up toward $0.46. However, the move accompanies lower trading volumes, risking a pullback toward the lower trendline instead.

If ADA breaks above the upper trendline later—say, at the wedge’s apex where two trendlines converge—then its price target comes to be around $0.40, up only 5.81% from the current price level.