Cardano [ADA] seems to have shifted gears in favor of a bullish recovery in June as is the case with its performance so far. ADA bulls are once again showing their strength this week after maintaining an upward trajectory during the weekend and well into Monday, 6 June. But can they maintain the same momentum, or are they due for another correction?
A closer look at ADA’s current price action reveals that the bulls were aided by the lack of enough bearish volume at the end of last week. The bears lacked enough momentum to push the price towards the downside after reaching the 50% RSI level. As a consequence, the slight correction in the first few days of June was rather weak, paving the way for more accumulation and an uptick.
ADA bulls size up the upcoming resistance
ADA traded at $0.625 at press time after a 9.98% rally in the last 24 hours. However, the price uptick has notably pushed ADA into territory that has been tested as resistance at least two times in the past. If a similar outcome occurs, then we should expect another bearish retracement in the next few days is there a breakout potential?
ADA is currently rallying above the 50% RSI level and is now approaching its 50-day Moving Average. The last time ADA traded above the 50-day MA was before mid-April. Such a crossing would encourage more investor confidence.
ADA’s uptick is currently underpinned by increasing bullish momentum and some accumulation. It still has room for more upside considering that it is currently trading within a descending and resistance channel. However, the extent of the bullish reign remains uncertain and tied to prevailing market conditions.
On-chain metrics may provide a rough but clearer picture of whether ADA will extend its current rally. ADA’s supply distribution by balances on addresses reveals what the top holders, AKA whales, have been doing. For example, addresses holding more than 10 million ADA reduced from 49.13% to 49.08% from 1 June to 6 June.
Addresses holding between 1 million and 10 million ADA increased from 17.44% to 17.51% between 1 June and 6 June. The market cap bounce back seems to have been more aligned with the latter group.
Whales accumulating the token seems to ring good news bells for ADA. The probability of breaking through the narrow range is heightened and the potential implication is that ADA’s price floor will likely increase. This is assuming that the market is recovering from the risk-on conditions that prevailed in the last few weeks.