ADA breaks convincing downtrend – what’s next?

ADA has formed support at $ 1.20 for the past 2 weeks and recently broke a strong resistance area at $ 1.30. The move also broke resistance on a trendline that has been in place since early November.

Technical analysis shows that ADA has seen strong upward momentum in lower time periods towards the end of the year, although the social media presence and sentiment are a bit gloomy.

Well-developed network based on on-chain data

According to CoinGecko data, ADA is down nearly 4% in the past 24 hours, up 15.5% in 7 days, and up 823% year over year. That sounds impressive, but the price seems to be lagging behind the network growth.

In the course of 2021, the Cardano ecosystem will reach a number of important milestones as the first 3 phases of Byron, Shelley and Goguen are now almost fully implemented in the Cardano roadmap.

In early March, Cardano announced Mary’s hard fork, which offers native tokens and a multi-asset ledger. Next, the Alonzo hard fork, which will be released in September 2021, will bring programmability to Cardano. It also enables the creation and deployment of Plutus-powered smart contracts that usher in the basho era.

These developments promote the rapid growth of the network, as community aggregators of Cardano projects estimate that there are currently around 274 projects under development or active in the network.

The number of transactions also exceeded 23 million in December. In addition, Cardano currently has 2.5 million native assets, including over 2 million NFTs.

IntoTheBlock’s In / Out of the Money indicator analyzes the number of addresses and volume of a cryptocurrency based on their returns. These addresses are then divided into clusters to identify key shopping areas based on blockchain data and are expected to act as support or resistance to price.

Paying in / out money from ADA | The source: IntoTheBlock

According to In / Out of the Money, ADA faces a selling wall at $ 1.46 to $ 1.63. One or more large sell orders were placed from $ 1.46 to an all-time high of $ 2.97.

Conversely, there is a “huge” support of $ 1.21 to $ 1.32 as nearly 562,000 addresses have placed purchase orders nearby. At the time of writing, ADA is trading at $ 1.41.

Technical analysis

Technical analysis shows that ADA has had strong upward momentum in the lower year-end time frames, although the social media presence and sentiment are a bit bleak.

ADA / USDT billion | The source: TradingView

The downtrend line (white) was convincingly broken and retested. In addition, the previously short-term supply also shifted to demand. The 21 SMA (orange) cross above the 55 SMA (green) on the hourly chart shows strong bullish momentum.

The Fibonacci retracement levels from the November high of $ 2.37 to the December low of $ 1.18 show that the 23.6% and 38.2% fib retracement levels are important to overcome is applicable. ADA tested $ 1.46, could make a higher bottom and break it soon.

Plus, Bitcoin actually has a significant impact on ADA’s price movement. If the crypto king manages to stay above $ 50,000 in the next few days, ADA will have a racing time of $ 1.64.

ADA / USDT billion | The source: TradingView

The range-volume profile shows a checkpoint at USD 1.30 where ADA broke through on strong volume. The A / D line also made a series of higher lows over the past week, but has not yet broken the monthly high.

Awesome Oscillator has been creating red bars in the past few hours but remains above 0. The price has fallen slightly to test buyer strength at $ 1.42 and a further drop to $ 1.4 cannot be ruled out. A safe bet would be to wait for $ 1.47 to flip in support before jumping in.

Overall, the ADA price has gone up over the past week. Despite significant resistance between $ 1.30 and $ 1.45, buyers pushed the price higher relatively quickly. This shows bullish strength.

Bitcoin is also active, although that could change as it nears the $ 53,000 to $ 54,000 region. Hence, any purchase from ADA should be carefully monitored as BTC can adversely affect it.

You can see the ADA prices here.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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