ADA was on a price rally and could retest the previous support turned resistance at $0.2531. A drop below $0.2397 would invalidate the bullish forecast.
Cardano is a third-generation Blockchain network created to solve problems of the bitcoin and Ethereum network. In fact, it is known as one of the networks capable of replacing the Ethereum network.
As for the platform itself, it can be said that it is open source and offers great scalability and security thanks to the way it is built. Broadly speaking, it offers a unique platform within the cryptocurrency system.
Cardano (ADA) traded within a range in late November 2022, before trending down in December 2022. However, ADA bulls found stable support at $0.2441 and used it to initiate a rally.
At the time of collecting this data, ADA was trading at $0.2472, up 1.9% in the last 24 hours. If the bulls keep up the momentum, ADA could retest or break above the previous support level of $0.2472.
Cardano Resistance at $0.2531: Can the Bulls Retest It?
ADA’s decline from its mid-December trading range of $0.2531 to $0.2652 was held in check by support at $0.2441. If the bullish momentum strengthens, the rally could reach or retest the previous lower bound and support at $0.2531.
The Relative Strength Index (RSI) has pulled back from oversold territory, indicating increased buying pressure. Also, the Money Flow Index (MFI) showed a rally, indicating a massive accumulation of ADA coins due to their reduced prices.
The Chaikin Money Flow (CMF) recovered from the zero line and rose above the zero mark. This demonstrated that the buyers had an increasing influence in the market.
If buying pressure builds, ADA could go higher and retest the $0.2531 level. Risk-averse investors can profit at this point. A move above the previous trading range could be contingent on strongly bullish Bitcoin.
However, a break below $0.2397 would undo the previous bullish forecast. Such a downtrend could see ADA settle at $0.2298.
ADA Saw Better Demand in the Derivatives Market
According to Santiment, the demand for ADA in the futures market decreased in mid-October, early November, and mid-December 2022.
Currently, demand improved as Binance funding rates pulled back from negative territory and jumped into positive territory.
There was also a slight improvement in weighted sentiment, suggesting that the investor outlook for the asset has improved. Could demand in the derivatives market and improving investor confidence fuel the uptrend?
Nevertheless, investors should keep an eye on the performance of BTC prices to assess the movement of ADA.
It is important to remember that although Cardano’s technology is unique and advanced, there is also a risk that it may not finally take hold and its network will not be used by users.
By Audy Castaneda
