Cardano ADA Price Analysis: Potential Breakout and Volume Levels to Watch

Cardano‘s native asset ADA is attempting to recover after a terrible August characterized by a drop from local peak levels around $0.31 to the main support level at $0.25. The popular smart contract altcoin has been trading in a narrow range with an upper limit of $0.275 for the past three weeks, leaving investors wondering which direction ADA will move.

ADA Price Potential Breakout

Maintaining support at $0.25 over the past three weeks has helped ADA escape selling pressure. Despite several attempts to weaken the upper limit of the wider price range, bulls have failed to capture the momentum to sustain the upward trend. The narrow range indicates a lack of dominance from buyers or sellers. Investors may expect this deadlock to be resolved by listening to the bullish call from the Moving Average Convergence Divergence (MACD) indicator and starting to open positions for a potential breakout.

While the blue MACD line crossing above the signal line provides a buying signal, it is not sufficient for a significant upward movement. The indicator needs to move upwards towards the average line (0.00) and the positive zone. As the overall cryptocurrency market continues to be under selling pressure, investors may not want to actively trade Cardano at the moment. However, a breakout above the 50-day Exponential Moving Average (EMA) at $0.2584 and then above the narrow range boundary could provide several profitable opportunities within a wider range.

At this point, it is worth noting that new buying orders can be opened above the 50-day EMA with a stop loss at the $0.25 level or slightly lower range support. A breakout triggered by upward momentum may be accompanied by an increase in volume, and buyers may start selling at the 100-day EMA. However, buyers may also choose to wait until ADA reaches the upper range boundary at $0.275.

On the daily timeframe, the Relative Strength Index (RSI) has risen to 40 after its journey to the oversold zone, indicating that bulls are still trying to influence Cardano despite the weak market structure.

Equalized Volume Levels for Inflows and Outflows

For ADA to sustain its upward trend, investors need to be willing to make purchases, which will be followed by an increase in momentum. For now, the Balanced Volume indicator shows that inflow and outflow volumes are equal, indicating no increase in momentum. This suggests that ADA lacks sufficient liquidity to rise in price.

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