ADA price rallying as traders become more bullish and ready to test the $1.2 resistance?

The on-chain analytics company Santiment record Trader optimism increased significantly on crypto social networking sites as Bitcoin and the broader market rallied.

Social volume (blue) and scale dominate society (Yellow) | Source: Santiment

Looking at the price chart, ADA is recovering along with the rest of the altcoin market. At press time, ADA is trading at $1.13, up 6.5% over the past 7 days, according to CoinMarketCap data.

What Do On-Chain Indicators Say?

The ADA on-chain signals provided by IntoTheblock have mostly turned bullish at press time. The number of ADA addresses has increased since early 2022.

sign On-chain from ADA | Source: IntoTheBlock

The number of addresses with balances between 10,000 and 1,000,000 ADA has increased by a staggering 15,000% since mid-December 2021. According to Santiment, this group of investors doubled their holdings by accumulating $53.6 million in tokens at the end of January. Additionally, the balance of addresses with 1-10 million ADA increased by 40.65% in the first month of 2022 alone.

After the launch of dApps on Cardano, transactions interacting with smart contracts now make up the majority $ADA transactions.

Read more about the state of Cardano and how its design is revolutionizing smart contract platforms: https://t.co/QZcJS5wL8G pic.twitter.com/E5kOx2s71l

— Kraken Exchange (@krakenfx) February 4, 2022

“After starting the dApp (decentralized application) On Cardano, transactions interacting with smart contracts now make up the majority of ADA transactions.”

Leading exchange Kraken pointed out in its report that the current price action of ADA along with the number of daily transactions can be a bullish indicator. Kraken also noted that following the launch of the dApp on Cardano, smart contract interactions now make up the majority of ADA transactions.

The total number of Cardano wallets recently surpassed the $3 million mark. As of December 24, the number is 2.5 million, and more than 500,000 ADA wallets have been added since then.

Technical Analysis

ADA broke above $1.1 yesterday and entered a test of critical resistance at $1.2.

• Key support levels: $1.1, $1.
• Key resistance levels: $1.2, $1.36.

The market turned bullish yesterday and ADA broke the key resistance at $1.1 which is now acting as support. The next level to break is $1.2 and the Cardano cryptocurrency is still gaining momentum to challenge it. ADA will likely test this level in the coming days depending on the overall market. The good news is that the general market situation is currently tilting in favor of buyers.

Source: TradingView

Trading Volume: ADA closed in the green for the last 3 days. While the trading volume is not high, the bulls are overwhelming.

RSI: The daily RSI is making a higher low, which means bullish. To make a higher peak, the index needs to move above 65 points, a long way from the current 50-point level.

MACD: The daily MACD turned bullish yesterday after entering positive territory. Right now, momentum is favoring the bulls, but ADA will have to struggle against the $1.2 resistance.

Source: TradingView

The current trend is up. A clear break above the key resistance will open the way up.

Short term ADA price prediction

Price action for ADA turned bullish yesterday and now the buyers are preparing to attack the $1.2 resistance level. This is the main challenge. If successful, the cryptocurrency, which ranks 6th by capitalization, could start a stronger upswing.

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