- After a major correction, ADA price rose more than 1.5% in 24 hours
- Metrics looked bullish, but market indicators suggested otherwise
Cardano [ADA] Recorded a major price correction last week, which pushed the price of the token to $0.42. However, the scenario changed in the last 24 hours when its daily chart turned green. Ergo, the question: does this indicate the beginning of a bullish rally? One that Cardano has been planning for several weeks?
Cardano following a historical trend
ADA did not start May on a good note as the bears took control of the token’s price. However, that changed shortly after as the cryptocurrency rose nearly 2% to trade at
$0.4677 with a market capitalization of over $16.6 billion, at press time.
Now, while this may not seem optimistic at first glance, there is more to the story here. Ali, a popular cryptanalyst, recently shared a https://twitter.com/ali_charts/status/1786323540045668405 highlighting how ADA has been mimicking the price action of 2019. According to the same, the altcoin consolidated within a parallel channel, signaling the end of the bear market in 2019.
At that time, Cardano broke out of the channel with a 75% rise, followed by a 56% price correction, setting up the market for a massive 4,095% bull run.
It would appear that ADA began acting similarly in 2023, with the cryptocurrency consolidating within a parallel channel before breaking out with a 72% surge. If the altcoin finally ends its correction on the charts, ADA can be expected to start another bullish rally. If that happens, crypto will soon reach new heights.
Since the probability of a massive rally is high, this could be the right time to accumulate. And yet, the total number of Cardano holders has remained stable over the past three months, a sign that new investors did not buy ADA.
What do the metrics say?
AMBCrypto then analyzed the Santiment data to see if the metrics also hinted at history repeating itself. One bullish metric was the MVRV index as it recorded a strong rally.
Whale activity around the token also remained high last week. Furthermore, Cardano’s open interest increased along with its price, a sign that a bullish bullish trend could continue.
However, unlike the aforementioned metrics, most of the technical indicators appeared bearish. For example, the money flow index (MFI) recorded a sharp drop. The Chaikin Money Flow (CMF) also followed a similar trend.
These suggested that ADA might not be able to initiate a massive bullish rally, at least in the short term.
Realistic or not, here it is ADA market capitalization in terms of BTC
On the contrary, the MACD showed a bullish crossover. If a bullish rally occurs, it will allow more investors to be in a better position.
This was the case, as at the time of this publication, only 35% of ADA investors made profits, according to IntoTheBlock. data.
Next: Bitcoin’s path to $65,000 – here’s what needs to happen for that price target
This is an automatic translation of our English version.
