Can ADA gain 23% after the planned $1.5 billion burn from the federal budget?

Cardano price has struggled to gain momentum despite recent network upgrades and the full implementation of on-chain governance. As the community debates the potential burn of 1.5 billion ADA from the treasury, many are wondering if this move could trigger a 23% price surge. Given the volatility of the broader crypto market, the question is, could a treasury burn give ADA the boost it needs to break out of its current downtrend?

Can ADA drive Cardano price higher?

Cardano proponent Big Pey suggested that the Cardano community, which now has complete control over the chain, could initiate a vote to burn all 1.5 billion ADA in the treasury.

Now that #Cardano has full on-chain governance.

There are 1.5 billion $ADA in the treasury. The $ADA Community could vote to remove all $ADA.

Would you vote to ban all $ADA? If not, what do you think we should spend the money on?

— big Pey (@bigpeyYT) 3 September 2024

Reactions to the post included users advocating for locking 75% of the supply rather than burning the 1.5 billion coins, which only represent 3.3% of the total Cardano supply.

Others rejected the idea of ​​burning coins entirely, as it might only benefit short-term investors.

Meanwhile, Cardano founder Charles Hoskinson was critical of the future of Bitcoin, saying it could be better used in chains like Cardano.

The ADA price continued to fall despite moving within a potential bullish reversal pattern.

ADA Price Analysis: Is Breakout Still Possible?

Cardano price fell by 2.1% in the last 24 hours to trade at $0.322, also down 6% from last month. The broader cryptocurrency market has seen volatility after Bitcoin price fell below the $57,000 mark. Despite the recent decline, Cardano remains one of the top blockchain platforms, known for its scalability, security, and energy efficiency.

According to Cardano price analysis, ADA is currently in a falling wedge with support at around $0.30 and resistance at around $0.34. The market remains cautious as traders wait for a breakout with volume confirmation before buying the asset.

The Chang hardfork news is still making its way through as people grapple with the impact this news will have on the Cardano network. Should such a proposal make it to a vote, it could have a significant impact on the asset’s price.

ADA price action is nearing the end of the falling wedge, with little room to falter. This means the asset needs to choose a direction. Although it is predominantly a bullish reversal pattern, falling wedges can break out to the downside when there is high selling pressure.

Conversely, Cardano price could break out of the wedge to the upside and rally 23% to target the $0.40 price target. On the way up, ADA could face resistance near $0.35 and $0.37.

Overall, given the volatile Bitcoin price action and the newly updated network, Cardano is currently a sought-after asset. A significant development on any of the mentioned fronts could push the ADA price up or down depending on the nature of the update. This makes Cardano a risky asset for most investors at the moment.

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Evans Karanja

Evans Karanja is a crypto analyst and journalist with a strong focus on blockchain technology, cryptocurrency, and the video game industry. His extensive experience includes working with various startups to deliver insightful and high-quality analysis that resonates with their target audiences. An avid crypto trader and investor, Evans is excited about the transformative potential of blockchain in various sectors. Outside of his professional activities, he enjoys playing video games and exploring scenic waterfalls.

Disclaimer: The content presented may contain the personal opinion of the author and is subject to market conditions. Conduct market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.