Cardano (ADA) is showing signs of fragility just as Ethereum’s Pectra upgrade goes live today, May 7. Although ADA posted a modest 2% intraday gain, historical patterns suggest that Ethereum upgrades often trigger downside pressure on Cardano.
Could history repeat itself and push ADA below key support at $0.66?
Why Cardano Price Risks Falling After Ethereum Upgrade
Cardano and Ethereum have long competed as top layer-one blockchains. But past Ethereum upgrades have often coincided with ADA price declines.
ADA price Source : TradingView
- In 2021, ADA plunged after Ethereum’s London upgrade, which introduced a fee-burning mechanism.
- The Merge in 2022, which shifted Ethereum to proof-of-stake, also marked a drop for Cardano.
- More recently, the Dencun upgrade in early 2024 saw ADA slide over 65%.
Now, with Pectra rolling out, a similar scenario could play out again. If ADA repeats history, investors may see a sharp pullback in the coming days.
Long Liquidations Threaten Deeper Correction
A cluster of long positions around $0.66 puts extra pressure on ADA. If the price falls to that level, over $5.4 million in long positions could be liquidated, sparking a selloff.
Crypto analyst Kamil warned that traders are “playing with fire,” pointing to high leverage and growing volatility.
Adding to concerns, whale activity and transaction volume have dropped by up to 83%, a signal that confidence among big players is fading.
One Bullish Hope: Cardano Network Activity
Despite bearish signals, Cardano isn’t out of the game yet.
Data from DeFiLlama shows that the stablecoin market cap on Cardano has reached an all-time high. This could indicate growing adoption and network usage, which might support ADA’s price and challenge the bearish thesis.
Cardano Technical Outlook: Mixed Signals
Technically, ADA remains trapped in a descending parallel channel. The RSI recently failed to break above 50, showing waning buying momentum.
However, there’s a glimmer of hope: the MACD has flashed a bullish crossover, suggesting that momentum could shift soon. For a confirmed breakout, ADA must close above the channel’s resistance and push the RSI past 50.
Conclusion
Cardano faces a potential downturn as Ethereum’s Pectra upgrade goes live. Past trends suggest pressure is likely, especially with declining whale activity and looming liquidations. Still, a rise in network usage or a bullish breakout could flip the narrative.
Traders should watch the $0.66 level closely—holding above it could be key to avoiding a deeper decline.
