Cardano Must Break Crucial Resistance to Head to $2

Key Takeaways

• Cardano remains stagnant despite breaking out of a descending triangle.
• The $1.33 resistance level has proved to be significant for ADA’s trend.
• Only a daily candlestick close above this barrier could see prices rise to $1.91.

Cardano has broken out of a consolidation pattern, but it’s lacking the volume it needs for a trend reversal.   

Cardano Faces Stiff Resistance

Cardano has not had the strength to advance further after breaking out of a descending triangle on Jul. 24. The $1.33 resistance zone has prevented ADA from achieving its upside potential. 

Although the technical formation forecasts a 54.55% upswing toward $1.91, trading volume remains almost flat. 

Amazon’s negative stance on supporting cryptocurrency payments may have contributed to Cardano’s stagnant price action. Now, time is running out for the fifth-largest cryptocurrency by market capitalization to make its final move. 

Buy orders need to increase at the current levels for ADA to target higher highs and avoid a steep correction.

Source: TradingView

IntoTheBlock’s In/Out of The Money Around Price (IOMAP) model shows that 250,530 addresses have previously purchased over 4.34 billion ADA between $1.30 and $1.35. Holders within this price range could be trying to break even on their underwater positions, which would hold the asset back. 

A spike in buying pressure that allows Cardano to move past $1.33 might be all that is needed for prices to rise toward the $1.91 target presented by the descending triangle as the IOMAP model shows no other significant supply wall ahead. 

Source: IntoTheBlock

On the other hand, transaction history reveals that the most critical support level underneath Cardano sits between $1.06 and $1.21. Here, 243,700 addresses bought 3.35 billion ADA. 

This demand barrier must hold in the event of a sell-off since the next support level sits at $0.35, according to the IOMAP model.