Cardano founder Charles Hoskinson rejects claims that the price of Cardano will crash by up to 90%. Indeed, that's what a new analysis suggests.
Input Output Global (IOG) CEO Charles Hoskinson rejects a prediction by chart guru Peter Brandt that Cardano (ADA) could lose up to 90% of its value.
Hoskinson insists: he would "really loathe" technical analysis and compares the process to voodoo as it makes no sense.
"WITH ALL DUE RESPECT TO PETER, I DON'T THINK IT WORKS THAT WELL. THE OTHER THING IS THAT THE MARKETS ARE SO MUCH MORE COMPLICATED."
What did Peter Brandt say in the first place?
The CEO of trading firm Factor LLC, Peter Brandt, recently published a technical analysis of Cardano that points to a so-called head-and-shoulders pattern in the chart.
According to Brandt, he had predicted a similar setup in 2018 for Litecoin, which later proved to be correct. Now Brandt says ADA is poised for a downward move that could take the coin as low as $0.12. At the time of analysis, that represents a 90 per cent drop from the price.
"I REMEMBER BEING MOCKED RELENTLESSLY WHEN I IDENTIFIED THIS TOP IN $LTCUSD IN MID 2018."
A head and shoulders pattern is a technical indicator with a chart pattern described by three peaks; the two outer "shoulders" are close together while the middle "head" is highest. They usually indicate a trend reversal from uptrend to downtrend and signal the end of an uptrend.
If the pattern plays out as expected, the Cardano price will soon break below the horizontal neckline and fall by the height between the top of the middle head and the support line.
Cardano founder refutes effectiveness of technical analysis
In response to Brandt's prediction, Hoskinson dismissed the analysis in a recent AMA (Ask Me Anything): he downplayed the efficacy of what was being said, calling it an "arbitrary interpretation of charts".
"IF YOU ACTUALLY RESEARCH WHAT PETER SAID, THERE WERE TONS OF DISCLAIMERS, TERMS AND CONDITIONS, AND IT WAS PURELY TECHNICAL AND NOT FUNDAMENTAL ANALYSIS BASED ON HIS INTERPRETATION OF ARBITRARY CHARTS."
Moreover, Hoskinson points out that today's sophisticated, computerised methods make technical analysis, which relies only on candlestick patterns, obsolete in some ways.
"TECHNICAL ANALYSIS WORKED WELL BEFORE COMPUTERS EXISTED AND WHEN PEOPLE TRADED WITH SOME DEGREE OF INTUITION OR ALONG WITH FUNDAMENTAL ANALYSIS. IN THE AGE OF QUANTS AND KI-BLACK-BOX MODELS AND BIG DATA AND ALL THOSE THINGS, IT MAKES NO SENSE AT ALL TO LOOK AT A SIMPLE CANDLESTICK CHART ANYMORE.
Cardano is up over 670% since the beginning of the year and has maintained a relatively stable performance during the recent crypto crash.