• Cardano price rally on Monday suggests that a larger bullish move might be in the works.
  • On-chain data shows a comeback in investor interest and entry of institutional investors.
  • Investors could reaccumulate ADA if it were to fall to $0.456, the 61.8% Fibonacci retracement level.
  • A daily candlestick close below $0.42 would invalidate the bullish thesis, possibly triggering a 7% decline to $0.39.

Cardano (ADA) price could be set for a 15% rally after the sharp 7% price increase seen on Monday, technical indicators and on-chain metrics show. The recent price action of the so-called “Ethereum-killer” has formed a double-bottom technical formation and broke above the key $0.47 resistance, a bullish sign that is also supported by increasing network activity.

Also read: Cardano Price Forecast: ADA sets the stage for a 20% rally

Cardano price looks set to rebound 

Cardano price, in the four-hour time frame, broke the resistance level of $0.47 on Monday and has held above it. From May 10 to 15, the Relative Strength Index (RSI) posted a bullish divergence with price, or when the RSI shows higher lows and prices form lower lows. This would point to increasing bullish momentum, and a move above the oversold area could work as the catalyst for a fresh long position.

In the first half of May, Cardano price created a peak at $0.47 after bouncing off the $0.42 support level twice. This ‘W’-like structure (double-bottom pattern) is a bottom reversal pattern and often hints at a potential trend reversal, favoring the bulls. If bullish momentum persists and ADA is able to break the resistance at $0.52 – a daily high from April 22 and the monthly pivot level of April – it is likely to rally 15% to $0.60, the high from April 11.

In the event of a decline, the Volume Profile indicator shows that the range between $0.47 and $0.45 is a good support zone. This area harbors the highest traded volume level, making it a good place for investors to buy the dip. To add more credence to this area, the 61.8% Fibonacci retracement level at $0.45 also roughly coincides with this area, making it a high probability reversal zone.  

ADA/USDT 4-hour chart

ADA/USDT 4-hour chart

Cardano’s on-chain metrics add to the bullish thesis. Data from IntoTheBlock shows a sharp increase in active addresses to 38,620 on May 20 from 21,640 on May 12. This suggests that the demand for Cardano is growing.

ADA Daily Active Addresses 

ADA Daily Active Addresses 

The number of transactions by large-wallet investors, or those exceeding $100,000, can also give clues over future price action. Looking at Cardano, there has been a spike in transactions,  showing that whales are gathering ADA tokens.

ADA Number of Large Transactions 

ADA Number of Large Transactions 

The Large Holders Netflow gives investors and whales holding more than 0.1% of the supply a sense of how their positions are changing. To put it briefly, netflow dips indicate lower positions or selling, while spikes indicate accumulation from major players. As seen in the chart below, the spikes in Netflow indicate the whales' accumulation.

ADA Number of Large Transactions 

Large Holders Netflow 

Despite strong on-chain data and technical analysis of Cardano, if the price could not break the resistance level of $0.52 and the overall crypto market is bearish, the prices of ADA could fall. 

If Cardano's daily candlestick closes below $0.42, the price will form a lower low relative to the May 15 swing low, resuming the downtrend for Cardano and probably causing investors to sell their holdings out of fear. This will refute the bullish argument, leading to a 7% crash to the next key support level at $0.39, which acted as a strong barrier in mid-April and mid-November 2023.

Also read: Week Ahead: Ethereum and DeFi to come under spotlight this week


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Ripple rides RWA narrative with Archax collaboration, XRP extends seventh day of losses to 8%

Ripple rides RWA narrative with Archax collaboration, XRP extends seventh day of losses to 8%

Ripple announced that the payment remittance firm extended its collaboration with FCA regulated digital securities exchange Archax. The collaboration is focused on Real World Asset tokenization, an emerging narrative in the ecosystem. 

More Ripple News

ONDO extends gains despite surge in profit-taking

ONDO extends gains despite surge in profit-taking

ONDO, the governance token of Ondo Finance, trades in the green on Friday, defying the effects of a surge in profit taking from large-wallet investors following the 76% gains seen in the past 30 days. 

More ONDO News

Monero price poised for a downward correction

Monero price poised for a downward correction

Monero (XMR) price has encountered resistance at a critical level. The technical outlook suggests a potential short-term correction as momentum indicators signal a bearish divergence.

More Cryptocurrencies News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Bitcoin braces for potential short-term correction

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Bitcoin braces for  potential short-term correction

Bitcoin price daily candlestick closes below the weekly support level of $67,147. Ethereum price is weakening and could retrace to its immediate support at $3,321. Ripple price fails to close above the 50-day Exponential Moving Average.

More Cryptocurrencies News

Bitcoin: Has BTC found a local price bottom?

Bitcoin: Has BTC found a local price bottom?

Bitcoin (BTC) price looks set for a mild fall this week, weighed by slight outflows in the US spot ETFs and the US Federal Reserve (Fed) keeping a hawkish interest-rate outlook despite easing inflation. Technical indicators suggest that BTC could face a further 5% correction in the short term before resuming the uptrend.

Read full analysis

BTC

ETH

XRP