- ADA decoupled from other assets in the market due to the surge in active addresses, large transactions
- Token has the potential to hit $0.35, but the $0.28 support needs to be solid
When the broader market decided that it was time to lay low, Cardano [ADA] declined to follow the same path. Instead, the native token of the Charles Hoskinson-led project was bringing home the bacon, striking it rich, and making a killing.
Read Cardano’s [ADA] Price Prediction 2023-2024
It’s green on ADA’s side
This was evident in ADA’s big pump on Thursday, 2 November. Unlike many other cryptocurrencies in the top 10, ADA’s price rose by 9% on the said date. Although the value had fallen at press time, the current on-chain condition indicates that there is a strong bullish bias for the token.
This inference was disclosed by Santiment, the popular on-chain analytics platform. According to Santiment, for instance, ADA’s appreciation has been one major event that has been going on since two weeks ago. Within the said period, ADA’s market cap jumped by 39%.
📈 #Cardano has been the big story Thursday, with its market cap growing +9% in the past 24 hours and now +36% over 2 weeks. As usual, #onchain activity hinted at this #bullish action with $ADA address activity & whale transaction at their highest in 3+ months.… pic.twitter.com/IYBBk3ssf4
— Santiment (@santimentfeed) November 2, 2023
The hike in the market cap is proof that a lot of ADA has been involved in transactions lately. Previously, ADA was recognized as the token out of the top 10 with a glaring underwhelming performance.
However, a breakout after sellers were exhausted was one of the factors that drove its hike in the last few weeks.
That being said, that’s not the only factor. Santiment also confirmed that there has been a surge in active addresses and whale transactions. In fact, both of these metrics hit their respective three-month highs on the same day Cardano jumped 9%.
Normally, higher prices attract more people to invest in an asset. This, in turn, leads to a growth in active addresses. But for Cardano, players came into the ecosystem in droves willingly without being coerced by a significant price action.
Pullback and a potential revival
Consequently, alongside the jump in whale transactions, one can infer that there could be something positive in store for ADA. That leads us to check the viewpoint displayed by the technical indicators at press time.
According to the ADA/USD daily chart, the market structure was largely bullish. Although the uptrend was accompanied by a few sell orders (red candles), it still reflected how solid buying dominance has been.
As per the attached chart, ADA’s uptrend was rejected at $0.32. However, one indicator that gives us an idea of its possible movement is the Stochastic Relative Strength Index (Stoch RSI). This indicator concentrates on market momentum and provides readings for overbought or oversold conditions.
The Stoch RSI reading of 83.98, at press time, implied that ADA was overbought. Therefore, there is a chance the price may retrace from $0.31, despite the current buying momentum. Should the Stoch RSI fall to 60.00 and bulls are still in control, that could be an entry point for short-term traders.
If this happens and ADA forms strong support at $0.28, then a possible jump to $0.35 may be on the radar. The Chaikin Money Flow (CMF) also buttressed this potential. At the time of writing, the CMF was 0.21, meaning there was enough buying pressure for ADA to pull another spike.
Upbeat positions around Cardano
Other on-chain metrics aiding a bullish period for Cardano were the volume and funding rate. According to Santiment, ADA’s volume had climbed to 464.75 million. For the price action to remain bullish, the volume needs to continue rising while the price does the same.
Traders, on the other hand, are also betting on a further hike for ADA. This sentiment was displayed by the funding rate, which measures the average position held by longs or shorts.
For context, a long is a trader forecasting a price incline while a short is one betting on a fall. With the funding rate in the positive zone, it means that most open positions are aligned with a potential price increase for ADA.
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Going forward, the $0.28 support is an important level to watch. Also, market participants need to watch out for the price levels where there is a significant accumulation of ADA as these could form some sort of resistance.