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Key Takeaways
- ADA is forming higher highs and trading above key Fibonacci levels.
- $0.684 is a crucial supply zone — a breakout is far from guaranteed.
- On-chain activity and development trends remain tepid, limiting long-term confidence.
Cardano’s native token ADA has gained 17% since early July, rising from $0.536 to $0.626. While the short-term outlook hints at bullish momentum, the broader market structure still casts a shadow of caution.
A closer look at both technical and on-chain indicators reveals that despite recent gains, Cardano’s rally may face stiff resistance unless momentum strengthens meaningfully.
Weekly Structure Still Bearish Despite Bounce
On the 1-week chart, ADA’s climb began after a bounce from the 78.6% Fibonacci retracement level at $0.535. While this level has held as support so far, the long-term market structure remains bearish due to a consistent pattern of lower highs and lower lows since December 2023.
If $0.535 is flipped to resistance, Cardano could see another steep drop, potentially falling 30–40% from current levels.
Bullish Momentum Building on Daily Chart
On the daily timeframe, ADA shows signs of strength. The coin has formed higher highs and higher lows over the past two weeks, with a successful breakout above the $0.62 level — the 50% Fibonacci retracement.
Key momentum indicators support the bullish bias. The Relative Strength Index (RSI) has crossed the neutral 50 line, signaling upward momentum. Meanwhile, the On-Balance Volume (OBV) is climbing, pointing to consistent buying interest.
However, major resistance lies ahead at $0.684 — the 78.6% retracement and a key supply zone formed by a fair value gap in June. A breakout above $0.68–$0.70 would confirm a strong bullish reversal.
On-Chain Activity Still Lagging Behind
Despite the technical setup favoring a short-term rally, Cardano’s on-chain activity paints a more cautious picture. According to Santiment, development activity — once a core strength of the network — has been steadily declining since February.
Also Read: Cardano DEX Volumes Crash as ADA Fights to Stay Above $0.57—What Traders Should Watch
The 180-day token circulation also shows a decrease in unique transactions, while daily active addresses have remained muted since March. These signals suggest that organic demand for ADA remains weak, possibly limiting upside potential.
While Cardano has seen a respectable 17% price increase in July, a clear breakout past the $0.68–$0.70 resistance zone is needed for lasting bullish conviction. Traders may eye short-term gains, but the lack of strong on-chain activity and the looming weekly resistance levels demand caution.
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.
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
