Cardano (ADA) Shows Signs of Life, But Can it Reverse the Bearish Trend?
Cardano’s ADA token has experienced a recent resurgence in interest, with its 24-hour trading volume surpassing $550 million. This uptick in activity is accompanied by a 4.43% price increase, bringing ADA to $0.4498 at the time of writing.
However, despite this positive movement, the overall situation for Cardano remains complex. Since mid-March, ADA has been on a downward trajectory, marked by a series of lower lows and highs. This indicates a persistent bearish trend that the token has yet to overcome.
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Reversal in Sight?
To reverse the bearish trend, ADA needs to break above a key resistance level of $0.5761. Currently, the token is far from reaching this point.
While there’s a long way to go, some technical indicators offer optimism for ADA holders. The Chaikin Money Flow (CMF) has surged to 0.6, suggesting a significant increase in money flowing into ADA. Additionally, the Relative Strength Index (RSI) has also grown, reflecting a rise in bullish momentum for the token.
On-Chain Activity Hints at Potential
On-chain data reveals a positive development – the velocity of ADA trading has increased significantly. This indicates a rise in the frequency of ADA being traded, which could be a bullish sign.
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Profitability and Selling Pressure
However, the MVRV ratio remains negative despite the price increase. This suggests that most ADA holders are still underwater on their investments. This lack of profitability reduces selling pressure on the token, allowing the price to potentially rise further until holders reach a break-even point. Once that happens, a price correction due to profit-taking might occur.
Cardano’s ADA token is showing tentative signs of recovery. While a complete trend reversal requires surpassing a key resistance level, positive technical indicators and increased on-chain activity offer some hope for ADA holders. However, the lack of profitability among holders creates a fragile situation, with a potential correction looming once profitability is achieved.
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Dr. Olajide Samuel juggles the demands of medical studies with a passion for cryptocurrency. A seasoned blogger, Olajide shares his vast global knowledge of the crypto space, offering insights to enthusiasts. Despite his busy schedule, his commitment to crypto remains strong, and he actively seeks ways to contribute to its future.
