- Cardano price is seeing a good recovery rate as it rallied 20% over the past ten days.
- Technical and transaction data show that the upside for ADA is capped at $1.26.
- A daily candlestick close below $1 will invalidate the bullish thesis and trigger further losses.
Cardano price shows signs of a bullish outlook but the resulting uptrend is likely to be capped due to multiple hurdles present in its path. Therefore, investors need to exercise caution around ADA and its upcoming rally.
Cardano price continues to move forward
Cardano price saw a 45% flash crash between January 20 and January 22 as a result of a similar occurrence in Bitcoin. Although ADA slid below the $1 psychological level, it did not produce a candlestick close below it. The recovery above this level was quick and so far, ADA has rallied 20% from the bottom and shows signs that this trend will continue.
While the upswing is impressive, it is going to face multiple hurdles in its path. Moreover, this run-up seems to be capped around the $1.26 barrier due to the presence of the 50-day Simple Moving Average (SMA).
ADA/USDT 1-day chart
Supporting this ceiling thesis for Cardano price is the transaction data obtained from IntoTheBlock’s Global In/Out of the Money (GIOM) model. This on-chain index shows that roughly 484,540 addresses that purchased nearly 6.2 billion ADA at an average price of $1.26 are “Out of the Money.”
Therefore, any short-term buying pressure that pushes Cardano price into this area will experience massive sell-side pressure.
ADA GIOM
Further suggesting this uptrend will be short-lived is the decline in the number of new addresses joining the Cardano blockchain from 73,780 to 63,310 over the past month. This 14% decline indicates that ADA investors are not interested in the prices at the current levels.
ADA new addresses
Regardless of the bullish outlook, Cardano price faces multiple barriers, rejection at either of these levels could send the altcoin sliding lower to $1. A daily candlestick close below this barrier will create a lower low, invalidating the bullish thesis.
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.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.