Cardano Price Prediction: Despite room for 31% gains, ADA might find it difficult to rally again

Cardano price corrected over the second half of December but is still sustaining the long-term uptrend.
The price indicators are suggesting a likely bearish turn of events, exhibiting the first bearish signal in four months.
A decline below $0.50 could result in the altcoin falling by 20% towards $0.40.

Cardano price noted a significant increase followed by a sharp fall towards the end of December. While it was an expected course of action from the altcoin, the present scenario dictates that the bearishness may not have completely waned off even though there is still room for growth for ADA.

Cardano price recovery could be an uphill task

Cardano price can be seen trading at $0.52 at the time of writing, recovering from the dip in the past two days. On the 3-day chart, ADA is exhibiting the potential to continue its long-term uptrend that began mid-October, as the third-generation cryptocurrency has not lost the support of the 200-day Exponential Moving Average (EMA).

Additionally, the uptrend line has sustained as support, too, after the altcoin successfully hit the target price of $0.68, attained from the double bottom pattern noted in the chart. Despite the correction, this target price can be reclaimed once again as it stands 31% away from the trading price.

However, price indicators, especially the Moving Average Convergence Divergence (MACD), are exhibiting the first bearish signal in nearly four months. The bearish crossover observed on the indicator, combined with the potential bearish impact of funds flowing into Bitcoin following the spot BTC ETF approval, could bring ADA down.

A test of $0.46 is the likely outcome since the 200-day EMA coincides with this price, but prolonged bearishness could drag ADA lower to $0.41 to coincide with the 50-day EMA.

ADA/USD 3-day chart

Nevertheless, if Cardano price bounces off the $0.46 support line and reclaims the resistance at $0.55, it might have a shot at rising towards the target of $0.68. For the same, the $0.60 level must be flipped into support, which would invalidate the bearish thesis.

Cryptocurrency metrics FAQs

What is circulating supply?

The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.

What is market capitalization?

Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.

What is trading volume?

Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.

What is funding rate?

Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.

Share: Cryptos feed

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