Cardano (ADA) has made a splash in the cryptocurrency market, recently outshining Bitcoin [BTC] in August. This impressive performance has positioned ADA among the top five cryptocurrencies that outperformed Bitcoin, signaling a potential bullish surge as the year progresses.
ADA’s Strong Price Action – Triple Bottom Pattern Emerges
Cardano’s price chart reveals a key bullish pattern: a triple bottom formation. The $0.32 level has emerged as a strong support zone, with ADA touching this level three times since the market crash on August 5. Each touch reaffirms the base, signaling that ADA could be setting up for a breakout.
Currently, ADA’s price action is consolidating within a triangle pattern, with the triple bottom acting as the base. The descending trendline has capped recent price highs, but a breakout above this resistance could propel ADA to higher levels.
The Fibonacci retracement tool offers further insights. Should ADA break and maintain a position above the 50% retracement level, it would signal a shift in sentiment, breaking the bearish outlook that has persisted for months. A confirmed breakout at the $0.37 level would validate a bullish reversal, with the 100% retracement level near $0.45 acting as a potential target for a full reversal of the previous downtrend.
Examining on-chain data reveals growing optimism among ADA’s long-term holders, also known as “Hodlers.” The number of addresses holding ADA for over a year has been steadily increasing, showing confidence in the asset’s future potential.
Notably, the 30-day change in holder data indicates a 0.68% increase in long-term holders, while short-term traders—those holding for less than 30 days—have surged by 3.8%. This renewed interest in short-term positions highlights rising market sentiment.
Moreover, ADA’s cumulative volume index has surged to $401 billion, suggesting strong market participation and further reinforcing the bullish case.
Cardano Open Interest Shows Stability
Another bullish indicator for ADA is the stability in its open interest for futures contracts, particularly at the $0.35 price level. Open interest has remained steady at $190.98 million, reflecting confidence among traders. The absence of significant fluctuations suggests continued interest in ADA accumulation.
According to data from Coinglass, ADA’s open interest has remained consistent since June 2023, with traders maintaining positions despite broader market volatility.
Market Sentiment – Smart Money Turns Bullish
Despite ADA’s strong performance, market sentiment remains divided. While crowd sentiment still leans bearish, smart money—typically more accurate in predicting market movements—has turned bullish on ADA. This divergence in sentiment may signal an opportune moment for traders to consider a position in Cardano.
Smart money often leads the market, while the broader crowd tends to enter too late. With this in mind, ADA’s current setup offers a compelling opportunity, particularly as bullish signals continue to develop.
Also Read: Cardano (ADA) Whale Activity Soars To $6.08B – What’s Next For The Price Surge?
As Cardano continues to show resilience and strength, its price action, on-chain data, and smart money sentiment point to a potential bullish breakout. The triple bottom formation, stable open interest, and growing confidence among long-term holders all support the case for higher ADA prices in the coming months.
If ADA can break through key resistance levels and sustain its upward momentum, a move toward $0.45 could be on the horizon, marking a full reversal of the recent bearish trend. For traders and investors alike, Cardano is one to watch as we approach the final quarter of 2024.
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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