Key Takeaways
After dropping below $1 billion on Jan. 13, Cardano’s (ADA) volume has increased by 60% in the last 24 hours and surpassed the $1 billion mark again.
This rise in volume indicates that market participants are again showing interest in the altcoin. Interestingly, it also coincided with the price increase from $0.89 to $0.96, indicating that buyers are snapping up more tokens.
But that is not all, as this analysis tells a deeper story about the cryptocurrency’s price performance.
Following the rise in volume, the ADA/USD daily chart shows a spike in the Balance of Power (BOP).
The BOP is an indicator that analyzes the strength of buyers (bulls) and sellers (bears) in the market by measuring their ability to push prices to lower or higher levels.
A positive BOP value indicates that bulls have the upper hand and can drive prices higher. A negative value, on the other hand, signifies the dominance of sellers, who can push prices lower.
Since the BOP on the Cardano chart spiked to 0.85, it indicates that ADA’s price is likely to trade much higher than $0.98 in the coming days. However, it is important to note that this could only be the case, if bulls keep up the dominance.
Cardano’s initial decline came after the price hit $1.03 on Jan. 12. After this hike, the price dropped to $0.89 the day after amid bearish momentum.
However, the 4-hour ADA/USD chart below reveals that the cryptocurrency seems to tow the same path that drove it to $1.03 earlier.
The current pattern, which appears to be a V-shaped recovery, is also similar to the rally that saw ADA’s price hit $1.15 on Jan. 7.
If bulls continue to outpace bearish dominance, then ADA could climb to the 0.786 Fibonacci level positioned at $1.09. If buying pressure intensifies, the target could be higher, and ADA could inch closer to $2.
However, if sellers strengthen their position and tug the price below the $0.236 Fib level, this prediction might be invalidated.
In that scenario, ADA’s price could slide again — below $0.88.