Reporter
- Those trading Cardano could look for a retest of demand zone as an entry point.
- Resistance at $0.787 might impede bullish movements.
Supporters of Cardano [ADA] have been anticipating this breakthrough for almost three months now. The resistance at $0.7 has finally been surpassed, marking an 80-day high. The volume of purchases has been steady while Bitcoin [BTC] remains above $60k.
The on-chain indicators for Cardano have also been positive, showing no signs of increasing selling pressure. The stabilization of Bitcoin above $60k could spark significant rallies in altcoins, which ADA could potentially capitalize on.
The breakout from the range and the predicted goal
Source: ADA/USDT on TradingView
The range that lasted for nearly three months is shown in purple, spanning from $0.448 to $0.678. Currently, the range highs have been breached, and there is a possibility of a retest within a demand zone over the coming days.
Predicting a breakout above the highs using the range width suggests that prices could reach $0.9172, which is a 33% increase from the range highs. The RSI shows strong bullish momentum with a reading of 73. Despite being overbought, it does not necessarily indicate an imminent pullback.
The trading volume surged post-breakout, leading to a sharp rise in the OBV as buyers entered the market. The indicators are reinforcing expectations of a bullish trend. Following the $0.917 target, significant resistance levels lie at $1 and $0.1246.
The lack of movement in tokens indicates minimal selling activity
There was a decline in the mean coin age starting in the latter part of February, with a notable spike in dormant circulation on February 26th. This spike suggested increased movement of ADA tokens between wallets, indicating selling pressure. However, since then, dormant circulation has been relatively quiet.
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Simultaneously, sentiment analysis showed a higher sentiment than any other day in 2024. The MVRV ratio reached new highs not seen since late December, indicating that holders were in a profitable position.
An increase in dormant circulation might signal an upcoming price correction.
Disclaimer: The views presented do not serve as financial, investment, trading, or any other form of advice; they are solely the opinion of the author.