Cardano Price Analysis: ADA/USD gains 70% in May, looks to post highest monthly close since June 2019
- Cardano remains on track to gain nearly 70% in May.
- Near-term technical indicators point out to extreme overbought conditions.
Cardano (ADA/USD) rallied on Thursday and rose more than 17% in a single day but stayed relatively quiet on Friday. The weekend trading allowed the pair to build on its gains. Following Saturday's upsurge, ADA/USD continued to push higher and touched its best level since June 20th, 2019, at $0.08730.
As of writing, the pair was up 5.15% on the day at $0.08100 and was on track to register its highest monthly close in 11 months.
The sentiment surrounding Cardano remains upbeat ahead of the key Shelly network upgrade. Although the hard fork is reportedly scheduled to be completed between June 30th and July 7th, Charles Hoskinson, CEO of IOHK, noted that the upgrade "opens up to everybody" on June 9th.
"Shelley-era functionality will deliver true decentralization through its advanced Ouroboros consensus algorithm and scientifically researched incentives scheme," Hoskinson added in a press release.
Technical outlook
On the daily chart, the Relative Strength Index (RSI) is staying near 80, pointing out that the pair is extremely overbought. The last time the RSI climbed to that same area back in late April, ADA/USD went into a consolidation phase that lasted nearly three weeks. If the pair is looking to extend its rally, it may need to stage a correction before doing so.
On the downside, $0.0750 (May 31 low) aligns as the first support ahead of $0.0700 (psychological level) and $0.06500 (previous 2020 high). On the upside, the pair could target $0.0900 before the critical psychological level at $0.1000.
ADA/USD daily chart
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
