Cardano (ADA), a popular cryptocurrency, experienced a significant 19.16% surge in value during the early days of February. However, this ascent has reached a plateau, as sellers have established a robust resistance zone. Although Bitcoin (BTC) has seen its own value growth, ADA’s buying activity has struggled to maintain pace, suggesting potential challenges ahead for the digital currency’s continued rise.
Assessing Cardano’s Current Market Trajectory
Market experts are closely watching the $0.54-$0.56 price range for Cardano, which is anticipated to be a critical liquidation zone. With a bullish pattern evident on the 12-hour chart, there’s speculation that ADA may reverse its recent downward trend. The Relative Strength Index (RSI) remains above the neutral 50 level, which could serve as a tailwind for the bullish outlook. Despite this, the On-Balance Volume (OBV) indicates a consistent decline throughout 2024, signaling mixed market signals.
Cardano’s breakthrough above $0.5205 earlier this month introduced a possibility for upside, but resistance at the $0.56 mark and a fair value gap at $0.55 set the stage for market hesitancy. This could imply a weakening of buying pressure, despite the defense of the $0.45 support level. For ADA to signal a move toward the $0.7 mark, bulls need to propel the currency past the $0.578 threshold.
Cardano’s Potential Price Directions
Current market conditions suggest that investors may explore short positions, targeting the $0.48 support zone, as they await ADA’s potential breakout. The recent uptrend in open interest aligning with the price suggests a former willingness among speculators to commit to long positions. However, the last day has seen a shift in this sentiment. Concurrently, the spot Cumulative Volume Delta (CVD) chart did not parallel this uptrend, and purchasing activity in the spot market for ADA has been notably subdued, reinforcing the possibility of a forthcoming rejection around the $0.55 level. Experts are leaning towards a likely retest of the $0.48 support zone.