Cardano Price Prediction: ADA to retrace 17% after recent uptrend
|- Cardano price rose roughly 53% in a week after tagging the $1.02 to $1.20 demand zone.
- This uptrend has pushed through the daily supply zone, extending from $1.54 to $1.76, pausing its rally.
- A six-hour candlestick close above $1.76 will invalidate the bearish outlook.
Cardano price witnessed an exponential increase over the past week and showed signs of slowdown as it approaches a massive hurdle. Investors can expect ADA to retrace and recuperate before it embarks on another leg-up.
Cardano price looks weary
Cardano price rose 53% after piercing the $1.02 to $1.20 demand zone on January 10. This impressive uptrend set a swing high at $1.64 inside the daily supply zone, extending from $1.54 to $1.76.
Interestingly, this area also harbors the weekly resistance barrier at $1.68, making this blockade a formidable one. Therefore, the logical outlook for ADA is a retracement. Although the scenario might seem bearish, it is necessary for the so-called “Ethereum killer” to kick-start a new upswing.
Investors can expect Cardano price to retest the weekly support level at $1.46 on its way down. It is unlikely that this foothold will absorb all of the selling pressure, so market participants can expect ADA to slide lower and tag the $1.31 platform.
In total, ADA this journey would constitute an 18% descent.
ADA/USDT 6-hour chart
Supporting this retracement thesis for Cardano price is IntoTheBlock’s Global In/Out of the Money (GIOM) model. This index shows massive clusters of underwater investors that could stop the uptrend dead in its tracks.
This hurdle extends from $1.71 to $2, where roughly 379,000 addresses purchased 3.77 billion ADA at an average price of $1.87. This area overlaps with the resistance barriers described from a technical standpoint, confirming the bearish outlook.
ADA GIOM
While things are looking temporarily grim for Cardano price, a six-hour candlestick close above the daily supply zone’s upper limit at $1.76 will alleviate a part of the selling pressure and invalidate the bearish thesis.
Market participants should consider this scenario due to the recent increase in daily active addresses (DAA) from 123,100 on January 6 to 135,080 on January 17. This 9.7% increase indicates that investors are interested in ADA at the current price levels.
ADA DAA
Investors should note that beyond $1.76, Cardano price will face multiple weekly resistance barriers at $1.87, $2.04, $2.21. Therefore, the uptrend will not be a walk in the park and will likely be choppy.
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