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02/19/2024

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ADA Skyrockets; AVAX Left Behind - Discover Why!

As Bitcoin crossed $52,000, investors got bullish on top altcoins. The altcoin market cap (TOTAL2) was close to hitting $1 trillion, last seen in 2021's bull run. TOTAL2's weekly RSI went over 70, hinting at a big market shift. But, there's caution due to past volatility. Investors are hopeful but watching closely to see if this uptrend sticks.

ADA Skyrockets; AVAX Left Behind - Discover Why!

As Bitcoin crossed $52,000, investors got bullish on top altcoins. The altcoin market cap (TOTAL2) was close to hitting $1 trillion, last seen in 2021’s bull run. TOTAL2’s weekly RSI went over 70, hinting at a big market shift. But, there’s caution due to past volatility. Investors are hopeful but watching closely to see if this uptrend sticks.

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In the dynamic market, Cardano (ADA) and Avalanche (AVAX) had contrasting experiences. ADA, backed by solid fundamentals and a strong online community, surged to about $0.64, up 19% in a week, despite a small dip today. Meanwhile, AVAX struggled due to an upcoming unlock of 9.5 million tokens, which led to concerns about its value dropping due to more tokens entering the market.

Cardano’s (ADA) Positive Outlook and Analysis of ADA

Cardano’s founder, Charles Hoskinson, is optimistic about the project’s future, citing a significant surge in Total Value Locked (TVL) of 166% quarter-over-quarter and nearly 700% year-over-year. This growth is attributed to strategic partnerships and an expanding ecosystem, along with a focus on privacy-centric solutions like Midnight.

Technically, Cardano (ADA) is experiencing oscillations between key support at $0.55 and resistance at $0.66, crucial for determining immediate market sentiment and potential direction. The Exponential Moving Averages (EMA) support a generally bullish trend, with the 10-day EMA at $0.62 above the current price and the 50-day and 200-day EMAs at $0.59 and $0.54, respectively.

Source: TradingView

The Relative Strength Index (RSI) at 66.94 suggests a slightly overbought condition, potentially indicating impending selling pressure. The Stochastic %K at 82.86 reinforces this overbought scenario. However, the Average Directional Index (ADI) at 36.39 indicates growing strength in the current trend.

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The Commodity Channel Index (CCI) at 100.63 and the MACD Level at 0.014 support a bullish momentum, although caution is advised due to the proximity of overbought conditions.

Cardano (ADA) Price Analysis: Bullish and Bearish Scenarios

In a bullish scenario, if Cardano (ADA) continues its current momentum and surpasses $0.66, it could aim for subsequent resistance levels at $0.7 and potentially $0.81. This aligns with market analyst Ali Martinez’s prediction of ADA reaching $8 by January 2025. Such a trajectory would be in line with the positive outlook indicated by both technical indicators and Cardano’s strong market fundamentals.

Conversely, in a bearish scenario, failure to maintain levels above $0.55 could lead ADA to retrace towards lower support zones at $0.49 and $0.38. Such a movement would require a reassessment of the bullish stance and a closer examination of market sentiment and fundamental developments.

Avalanche (AVAX) Token Unlock Event and Market Analysis

Avalanche (AVAX) sparked discussion in the crypto community due to the impending release of approximately 9.54 million tokens into circulation on February 22nd. This release, representing about 2.6% of AVAX’s total supply, raised speculation about its potential market impact. Interestingly, the aftermath of the previous unlock event in November showed no negative pressure on AVAX’s price; instead, the asset saw a significant increase, rising 5% in the first week and nearly 44% in two weeks. Such an unexpected market response sets a precedent that may influence investors’ expectations for the upcoming event.

AVAX is presently trading between its first support level at $37.91 and the first resistance level at $43.16. The Exponential Moving Averages (EMAs) are closely clustered, with the 10-day EMA at $40.15, the 50-day at $39.87, and the 200-day at $37.27, suggesting a neutral to slightly bullish trend in the short term.

Source: TradingView

The Relative Strength Index (RSI) at 47.36 indicates that Avalanche (AVAX) is neither overbought nor oversold, providing room for potential movement in either direction. However, the Stochastic %K, at a high 75.89, leans towards overbought territory, hinting at a possible pullback. The Commodity Channel Index (CCI) at -8.1 and a barely negative MACD Level of -0.09 further support this indecisive market sentiment.

These indicators, combined with the Average Directional Index (ADI) at a low 22.39, suggest a lack of a strong trend in either direction at the moment.

Whale Accumulation and Derivatives Outlook for Avalanche (AVAX)

The notable increase in accumulation by whales, with over 12 million tokens acquired since early February, alongside the growth in AVAX holdings by long-term investors, signals robust confidence among major stakeholders in the project.

Further reinforcing this positive sentiment is a 38% month-to-date surge in Open Interest in AVAX futures and a Longs/Shorts ratio surpassing 1. This suggests that derivatives traders are positioning themselves for a bullish future for Avalanche (AVAX).

In a bullish scenario, if these trends persist and are complemented by a favorable response to the token unlock, AVAX could surpass its first resistance level at $43.16 and set sights on higher targets at $46.03 and $51.28.

Conversely, the bearish scenario could unfold if the market views the token unlock as a risk of oversupply, potentially leading to selling pressure. This scenario might see Avalanche (AVAX) retracing towards $37.91. In a more severe downturn, the coin could test lower support levels at $35.53 or even $30.28.

In Summary

In the crypto world right now, Cardano (ADA) and Avalanche (AVAX) have their own stories to tell. ADA’s got Charles Hoskinson feeling optimistic because of a big jump in TVL and progress in its ecosystem. ADA’s looking good on the technical side too, showing a bullish trend with indicators pointing towards more positivity.

On the other hand, AVAX is facing a crucial moment with its upcoming token unlock, which has a history of surprising market reactions. AVAX is currently trading between important levels, and its future depends a lot on how the market sees this event and how confident investors feel, which makes it less clear where it’s headed compared to ADA.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

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  • Asad

    Asad is a dynamic and talented cryptocurrency content author who brings a wealth of knowledge and enthusiasm to every article. With a deep understanding of blockchain technology and a passion for digital assets, Asad's writing is both informative and engaging.

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