Cardano (ADA) is ready to break out – These are the factors supporting the bullish momentum.

Cardano (ADA) has recorded an impressive increase of 10% over the week, bringing its market capitalization to 23 billion USD, while daily trading volume approaches 700 million USD. This upward trend is rekindling interest in ADA, as a series of technical indicators begin to signal a consensus for a potential breakout.

The ADX indicator has surpassed a significant threshold, reflecting a clear strengthening trend. At the same time, the activity of the "whales" is also recovering after falling to the lowest level of the year. Notably, the golden cross pattern is gradually forming – a classic signal that often paves the way for large price movements. ADA may be entering a preparatory phase for the next significant growth.

The ADX indicator of Cardano indicates that the upward trend may be stronger

The ADX index (Average Directional Index) of Cardano has surged to 25.97 – a significant jump compared to the 17.41 recorded just two days earlier. This breakout indicates that the price momentum of ADA is strengthening, opening up initial signs of the potential formation of a new upward trend.

The increase in ADX clearly reflects the strength behind recent price movements. This could be a sign that Cardano is gradually breaking out of a low volatility accumulation phase to enter a more distinctly oriented growth cycle.

! Cardano ADX (Average Directional Index) Index | Source: TradingViewADX is a technical tool used to measure the strength – rather than direction – of a trend, on a scale of 0 to 100. Values below 20 indicate that the market has no clear trend, while levels above 25 reflect the formation and consolidation of a strong trend.

With the current level of 25.97, ADA's ADX has officially crossed the critical threshold, moving from a tug of war to a phase with a clearer trend structure. This development could be an indicator that Cardano is at the beginning of a sustainable growth cycle – especially if underpinned by high trading volumes and positive technical signals in the upcoming sessions.

The ADA "whales" are buying back in

The number of "whale" wallets of Cardano – that is, addresses holding between 1 million and 10 million ADA – has steadily decreased from April 6 to April 12, from 2,418 to 2,384 wallets. This is the lowest level since February 2023.

Nevertheless, the market recorded a positive signal yesterday as the number of wallets increased slightly to 2,389, marking a small recovery.

The number of addresses holding between 1 million and 10 million ADA | Source: Santiment. However, this increase is still not enough to reverse the overall trend, as the current figure is still significantly lower than in recent weeks. This indicates that large investors remain cautious and have not yet truly returned to the game.

Monitoring the behavior of "whales" is a key factor, as they have the ability to significantly impact the market due to their massive holdings. When the number of large wallets decreases continuously, it often reflects a profit-taking mentality or a lack of confidence in price prospects. Conversely, an increase indicates an accumulation trend, creating potential buying power that may push prices back up.

Although the latest recovery can be seen as a positive signal, the level of recovery is still quite weak. This indicates that ADA is still in the process of seeking sustainable growth momentum, but it is not yet convincing enough for major investors to return strongly. In the short term, this may limit the price's breakout potential, unless the accumulation wave from the "whales" returns more distinctly.

Cardano may be about to form a golden cross

The exponential moving averages (EMA) of Cardano are gradually converging, suggesting a high possibility that a "golden cross" pattern – a strong bullish signal – will form in the near future.

If this model is confirmed, it could create the necessary momentum for ADA to challenge the important resistance area around the $0.709 mark. A convincing breakout above this threshold could open up new growth potential, with the next target set at $0.77.

ADA/USDT 4-hour chart | Source: TradingViewHowever, the technical picture still carries many risks. Currently, ADA is trading just above two key support zones at $0.629 and $0.61. If either of these levels is breached, the uptrend will face the risk of being invalidated, leading to a return of selling pressure.

In a more negative scenario, if ADA loses both of the aforementioned support zones, the current trend could be completely reversed, pushing the price down deep into the $0.51 range.

Disclaimer*: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making any decisions. We are not responsible for your investment decisions*

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