Cardano (ADA), the native token of the Cardano blockchain platform, has been on a tear this past week, surging a remarkable 81%. This impressive rally catapults ADA to the position of the second-best performing cryptocurrency among the top ten digital assets.
The upward trend began on November 6th, propelling ADA’s price from $0.33 to a high of $0.62. Analysts are now dissecting the data to understand if the bullish momentum can be sustained.
Bullish Indicators Point To Continued Growth
Several factors suggest the bulls might not be finished yet. A key indicator is the Mean Dollar Invested Age (MDIA) metric for ADA. MDIA tracks the average age of circulating tokens. When this number drops, it’s often interpreted as a sign of renewed interest and liquidity flowing into the coin. As long as MDIA continues to decline, the Cardano price appreciation could continue.
Another crucial metric is IntoTheBlock’s “In/Out of Money Around Price” model. This model categorizes token holders based on the price at which they acquired their ADA. Currently, the IOMAP data reveals a strong support zone for ADA at $0.59. This area holds approximately 87,950 addresses with a combined 1.79 billion ADA tokens.
This concentration of support suggests a potential buying force if the price dips below the current level. Additionally, technical indicators also paint a bullish picture. Recently, ADA price broke out of a descending triangle formation on the weekly chart. While traditionally considered bearish, this breakout signifies a potential for a long rally, according to CNF.
Whale Activity and Market Sentiment
Further fueling the optimism are surging whale activities. According to IntoTheBlock, large Cardano investors have traded over 28.45 billion ADA, valued at $14.9 billion, within the last 24 hours. Notably, whale inflows into Cardano have skyrocketed by 393% in the last week and a staggering 2,855% over the past 90 days.
Market dynamics offer additional reasons for the sudden surge. Firstly, the recent Bitcoin rally, which saw its price rise 10.8% to $89,547, had a positive spillover effect on ADA and other altcoins. Secondly, Charles Hoskinson, Cardano‘s founder, recently participated in discussions regarding U.S. crypto policy, sparking speculation about potential ADA integration into government projects, as reported by CNF.
Can ADA Reach $1?
ADA currently sits within a rising channel, a continuation pattern that hints at further price appreciation. The main resistance level to overcome is $0.70, which coincides with the Fibonacci retracement level of 0.786. If breached, further resistance points lie at $0.81 and $0.95. A breakout beyond these levels could propel Cardano’s price towards the coveted $1 mark.
However, downside risks remain. The 24-hour trading volume has dropped by 48%, potentially indicating profit-taking by some investors. This aligns with ADA’s Relative Strength Index (RSI) currently at 76, which suggests an overbought condition.
Overall, the outlook for Cardano appears promising, with several bullish indicators in play. Whether the current momentum can sustain itself and propel ADA towards $1 remains to be seen. Careful monitoring of key metrics and market sentiment will be crucial in the coming days.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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