Cardano (ADA) Rebounds After 20% Drop, Signaling a Bullish Trend Shift
Key Takeaways
- Cardano’s price is close to rising above the 20 EMA after retesting $0.80 and holding the $0.68 support.
- On-chain data shows rising bullish sentiment in the market, suggesting that demand for ADA might rise.
- The MFI shows increasing buying pressure, which could drive ADA’s price much higher if sustained.
Cardano’s (ADA) price could be looking at completely erasing its losses within the last 30 days. During this period, ADA’s market value declined by nearly 20%.
The recent price action suggests that Cardano’s price could break above key support, with indicators hinting at rising buying pressure.
While a sustained upswing is possible, it might depend on some factors.
In this analysis, CCN reveals why ADA could trade higher and what it would take to keep the uptrend in check.
Cardano Finds Crucial Support
While still trading in a narrow range, Cardano’s price provided a much-needed cushion as it failed to slide below $0.68.
On the daily chart, support at $0.68 seems to play a vital role as ADA aims to breach the resistance at $0.80.
Beyond that, the altcoin’s initial decline led to the appearance of a death cross. A death cross is a bearish signal that occurs when a shorter-term moving average (MA) crosses below a longer-term moving average.
As seen below, the 50 EMA (yellow) positions above the 20 EMA ( blue). However, as ADA’s price tries to break $0.80, it also tests the 20 EMA.
Should the token rise above the 20 EMA, this could validate the bullish thesis the altcoin has been flashing.
Amid this attempt, on-chain data from Santiment reveals a rise in Cardano’s Weighted Sentiment. This metric tracks the tone of market commentary around an asset.
A negative sentiment typically signals pessimism, dampening demand for the cryptocurrency. In most cases, this negative sentiment suppresses demand.
However, as of this writing, Cardano’s sentiment is positive, with most market comments turning bullish.
Furthermore, ADA might experience increased buying pressure if this trend continues, which could drive the price higher.
ADA Price Prediction: $1 Rebound
Zooming into the daily chart again, the Money Flow Index (CMF) has broken above the downtrend experienced between Jan. 17 and Feb. 4.
As a result, the MFI reading is now above the neutral line. This indicates rising buying pressure around ADA.
In addition, the dots of the Parabolic Stop And Reverse (SAR) are below Cardano’s price.
Typically, when the dotted lines of the Parabolic SAR are above the price, it indicates resistance.
However, since it is the other way around, it means that ADA has found strong support for around $0.68 to keep the price trending upwards.
Should the MFI reading continue to rise and the Parabolic SAR hold this position, Cardano’s price could climb to $0.94.
Reaching this level could be a prerequisite to retest the $1 mark or surge above it.
On the contrary, if ADA fails to rise above $0.82, its value might decline. In that scenario, the token could decline to $0.70 or, in a highly bullish scenario, $0.54.
