Cardano [ADA] investors have reason to celebrate as the cryptocurrency has gained bullish momentum, defying the broader market’s recent price corrections. ADA’s performance in the last 24 hours has been impressive, with the token surging by over 4%, according to CoinMarketCap. At the time of writing, ADA is trading at $0.3589, boasting a market capitalization exceeding $12.9 billion, positioning it as the 11th largest cryptocurrency.
Despite the recent price increase, only 22% of Cardano investors are currently in profit, as highlighted by IntoTheBlock’s data. However, a bullish pattern has emerged on ADA’s daily chart, suggesting that the percentage of profitable investors could rise significantly in the coming days.
Bull Pattern On Cardano’s Chart
A closer look at ADA’s daily chart, as analyzed by AMBCrypto, reveals the formation of a bullish falling wedge pattern in February. This pattern typically indicates a potential upward breakout after a period of consolidation. Since the formation of this pattern, ADA’s price has been oscillating within the wedge, steadily moving towards a critical resistance level.
Should ADA successfully break above this resistance, a significant rally could be on the horizon. Specifically, a breakout could trigger a 100% price increase, potentially driving ADA’s value up to $0.7. This would represent a substantial recovery from its current trading price and could attract more investors into the market.
Will ADA Breakout?
The likelihood of a breakout seems plausible, based on several key on-chain metrics. AMBCrypto’s analysis points out that ADA’s Market Value to Realized Value (MVRV) ratio has entered positive territory, a bullish signal that indicates the potential for further price gains. Additionally, the token’s Open Interest (OI) has increased alongside its price. A rising OI generally suggests that the current price trend is likely to continue, bolstering the case for a breakout.
Moreover, Cardano’s social dominance has seen an uptick, reflecting growing interest and popularity in the token. However, not all metrics are bullish. The token’s Network Value to Transactions (NVT) ratio has spiked, indicating that ADA may be overvalued, which could lead to a price correction. Additionally, Cardano’s fear and greed index is currently in the “greed” stage, often a precursor to a market pullback.
Technically, ADA’s Moving Average Convergence Divergence (MACD) indicator has displayed a bullish crossover, further supporting the breakout narrative. The Relative Strength Index (RSI) has also registered an increase, suggesting positive momentum. However, the Bollinger Bands indicate that ADA is entering a less-volatile zone, which could temporarily halt the bull rally.
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If the bears regain control, ADA could drop to $0.28. Conversely, a successful breakout might see the token first targeting $0.45, before potentially reclaiming its February high.
As Cardano [ADA] approaches a critical juncture, investors are watching closely. The potential for a 100% rally is tantalizing, but the market remains unpredictable. Whether ADA will break out or succumb to a correction will depend on how these key metrics evolve 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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