- Cardano (ADA) is struggling around the $0.38 resistance but shows signs of a potential bullish reversal with increased trading volume and positive technical indicators.
- A recent upgrade and rising holder optimism could further boost ADA’s price recovery.
Cardano (ADA) has been experiencing a steady decline over the past weeks, with Sunday marking the fourth straight week of its downturn. This trend highlights ADA’s struggles as sellers continue to mount pressure on the asset. On June 18, 2024, ADA fell below the long-term bearish trendline. Over the past few days, the token has been playing around the $0.38-$0.39 resistance range. However, yesterday, June 24, 2024, Cardano (ADA) took a U-turn after hitting support at $0.362.
ADA trades at $0.390, attempting to cross over the resistance level. Moreover, trading volume has indicated a significant uptick, raising questions about buyers’ return to the market. Given this observation, can ADA flip the bearish barrier to cover new heights, or will the downturn continue? Let’s explore the possibilities.
Cardano Price Analysis: ADA Shows Bullish Signs After Recent Dip
Although Cardano (ADA) has struggled for a while, technical indicators suggest a turnaround might be brewing. From the chart below, ADA has found support at $0.36, indicating buyers are entering the market. Additionally, ADA is moving slightly above the 50-day SMA (yellow line), suggesting a short-term bullish sentiment. If buyers maintain this momentum, ADA could break above the 200-day SMA (red line).
Furthermore, the RSI is currently at 66, approaching the oversold area. The setup indicates increasing buying strength. The MACD is above its signal line, displaying strong bullish histogram bars that confirm the growing momentum. Moreover, ADA’s price is about to breach the Bollinger Band. Based on these indicators, ADA shows a bullish trend. The support at $0.36, the RSI at 66, the positive MACD, and the Bollinger Band breach all suggest continued upward movement.
Cardano’s New Upgrade and Holder Optimism
Cardano recently introduced a new upgrade tagged “docker-cardano-cli v8.24.0.0-1,” developed by Blinken Labs. According to the report, this update aims to improve Cardano’s functionality and performance. The new upgrade likely aims to improve staking access for Cardano users, making it more appealing and boosting network participation, which can lead to a higher demand for ADA tokens. Higher demand will ultimately trigger a price increase. Therefore, the update is likely to impact ADA’s market value positively.
One more factor that may help boost the price of ADA is Cardano’s holder optimism. Despite the recent price slump, many people are still actively involved with Cardano. IntotheBlock data shows that Cardano’s daily active users have increased by over 40%, and holders’ balances have slightly risen in the last seven days. This suggests that investors might be accumulating more ADA coins in anticipation of a rally.
Based on the Market Value to Realized Value (MVRV) ratio, now seems to be the right time to accumulate ADA coins. This ratio helps to determine whether investors are making profits or losses. Data suggests that less than 2% of those holding ADA are currently making a profit from the coin’s current state. Moreover, Cardano’s 30-day MVRV shows a 5% decrease, which means investors face losses. However, this could lead to more people wanting to buy ADA, increasing buying pressure soon. In the past, when ADA’s MVRV was between -8% and -19%, it often signaled the beginning of price rallies. This allowed people to accumulate more ADA to profit when the asset pumps.
If ADA holders add more tokens to their holdings now, Cardano’s price might bounce back.
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