Cardano
Assessing Cardano’s future as Bitcoin’s $63k support holds firm
Cardano (ADA) is all of a sudden seeing some minor action that has made investors wonder if it is making a comeback.
- ADA’s market showed a potential support forming below $0.50.
- Analysts predict ADA could reach new all-time highs, driven by historical trends.
It has been a rocky month for Cardano [ADA] and the rest of its altcoin siblings.
But now, as Bitcoin [BTC] manages to stay put well above the $63,000 mark, ADA has seemingly come back to life, seeing an increase of 4% as of the time this article was being written.
The catalysts behind Cardano
A key driver behind this upswing is the much-anticipated ‘Alonzo’ upgrade, which introduces smart contracts to the Cardano network.
This technological advancement is expected to enhance the network’s capabilities massively, aligning it more closely with Ethereum.
Further fueling ADA’s surge is a series of strategic partnerships, notably with the Ethiopian government.
Despite a shaky start to May, where bears seemed to have the upper hand, ADA was making a commendable recovery, climbing almost 4% to a trading price of $0.47.
With a market capitalization soaring past $16.33 billion, the token is signaling a bullish sentiment that could kickstart a break to its all-time high.
What the metrics say
In efforts to understand ADA’s market position further, AMBCrypto took an extensive look at data from Coinglass. ADA’s spot inflow to exchanges has remained weak, whereas the outflows continue to stay high.
Source: Coinglass
Notably, there were significant spikes in trading volume, particularly in short positions, coinciding with sharp declines in ADA’s price, indicating that traders are betting on or reacting to price drops.
The data also suggests that large volumes of short selling are likely driving the price downwards or responding to expected downturns.
The relatively subdued long position activity throughout suggested a lack of strong buyer momentum to drive up prices sustainably.
This pointed to a bearish sentiment prevailing during this period, with traders possibly capitalizing on or anticipating declines in ADA’s market value.
Meanwhile, AMBCrypto’s look at data from TradingView revealed that ADA’s trading activity was still significantly low, which could mean that the market is in a phase of consolidation.
The data tells us that Cardano’s market movements through February to April was a tug-of-war between bears and bulls, leading us to now having a mixed sentiment in the market.
Source: TradingView
As of the latest data point in May, the price appears to be stabilizing slightly below the $0.50 mark, after the recent downturn from that local high in April.
This stabilization hinted at a potential area of support where the bulls are beginning to step in, preventing further declines.
Analysts are adjusting their lenses to forecast ADA’s future. Notably, Altcoin Daily is predicting that ADA will break all-time highs this year, potentially reaching as high as $9 by the third quarter of 2024.
Read Cardano’s [ADA] Price Prediction 2023-24
Ali Martinez, another prominent analyst, supports this bullish outlook, citing historical trends as a basis for his predictions.
The expert pointed out that similar to patterns observed in 2019, ADA’s recent 50% price dip could be a golden opportunity for investors. So, he forecasted ADA hitting a new all-time high of $9.982.
