Cardano Price Outlook Weakens As Ethereum Pectra Upgrade Goes Live

Cardano (ADA) price may be on the verge of a decline after the Ethereum Pectra upgrade went live. Historical trends suggest that ADA often struggles whenever there is a major network improvement on Ethereum, and if this is the case this time around, the altcoin faces a steep loss as high as 86% in the coming weeks.

Why Cardano Price Faces Pressure from Ethereum’s Pectra

Cardano and Ethereum have been battling for layer-one dominance over the years. This battle has often led to ADA facing bearish pressure whenever there are improvements on the Ethereum network that seek to improve its scalability and usage.

This trend began in 2021 when Cardano price recorded its steepest correction after the London upgrade that introduced a mechanism to burn part of transaction fees to make ETH more deflationary. In 2022, ADA also declined after the Ethereum Merge that transitioned the network from proof-of-work to proof-of-stake.

The most recent ETH upgrade happened in March 2024, when Cardano dropped by 65% after Dencun. If history rhymes and the Pectra network upgrade fuels a decline for this ETH rival, the ADA price is at risk of a steep downtrend.

Looming Long Liquidations Put ADA at Risk

If Cardano will crash and lose critical support at $0.66 after the Pectra upgrade went live, the cluster of long liquidations that are around this level will fuel an even steeper dip. The liquidation map with a one-day lookback period shows that more than $7 million in long ADA positions will be closed if the price falls to this level, and this will trigger a spike in selling pressure.

Analyst Kamil reacted to this situation, stating that “ADA traders are playing with fire” as the high leverage on this altcoin will cause a spike in Cardano volatility as millions of positions are closed. Besides the high long leverage, another analyst also noted that a decline in whale activity and transactions will have a bearish effect on the Cardano price prediction. He opined,

“Whales are stepping back and transaction has been down up to 83%. Still watching out for its momentum to get stable otherwise we will embrace weakening confidence from big players.”

These market conditions indicate that it is likely for the price of Cardano to face downward pressure in the coming weeks, and this will match the historical patterns whereby the altcoin dropped when the network upgrades went live.

However, a spike in network activity may invalidate this bearish outlook towards the altcoin, as data from DeFiLlama reveals that the stablecoin market cap on the blockchain has reached an all-time high. This points to increased network usage that may bolster ADA’s utility.

Cardano Technical Analysis

The four-hour Cardano chart shows a mixed ADA technical outlook. The RSI is rising and has crossed above 50 to 53, indicating that the bullish momentum is gaining strength. Meanwhile, the MACD also created a buy signal after crossing above the signal line, confirming that bulls were in control. However, a sustained rally will only occur if this indicator flips positive.

Cardano price has also broken out of a descending parallel channel, indicating that it is about to escape the bearish trajectory. If it makes a decisive close above this resistance level, it will fuel the next rally past $0.70 and avert the long liquidations and the downside risk posed by the Pectra upgrade.

To sum up, Cardano may be on the verge of a downward correction if history rhymes and the recently released Pectra upgrade on Ethereum stirs a price decline. This bearish thesis will be invalid if ADA can make a decisive close from a descending trendline, as this will confirm that the trend is about to shift from a negative one to a sustained uptrend.