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02/16/2024

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Cardano Nears Breakout With Rising On-Chain Activity! Here’s The Next Resistance For ADA Price

Cardano has consistently appeared on the list of top gainers, due to its price experiencing significant increases and surpassing crucial resistance levels, especially after Bitcoin hit a $52K surge....

Cardano Nears Breakout With Rising On-Chain Activity! Here’s The Next Resistance For ADA Price
cardano

Cardano has consistently appeared on the list of top gainers, due to its price experiencing significant increases and surpassing crucial resistance levels, especially after Bitcoin hit a $52K surge. Consequently, there’s been a noticeable increase in Cardano’s on-chain activities, suggesting a possible breakout in the coming hours. Nevertheless, this upward trend could face pullbacks, challenging the patience of buyers at various levels.

Cardano’s Rising TVL Attracts Buyers

In the past 24 hours, Cardano’s price saw a total liquidation of approximately $1.26 million in positions, with both sellers and buyers playing equal roles. Recently, ADA’s price has seen an uptick in trading activity, as the open interest increased by more than 4.7%, reaching $430 million and leading to a spike in volatility.

This surge came following an uptick in TVL, attracting buyers recently. According to data, the Cardano ecosystem witnessed a remarkable growth in Total Value Locked (TVL) in USD, surging 166% quarterly and 693% annually. Indigo became the top protocol by TVL, surpassing Minswap. The TVL of Cardano’s stablecoins grew by 37% quarterly and 673% annually. Currently, the TVL for Cardano is at $401.5 million.

IntoTheBlock reports indicate an increase in Cardano’s large transaction volume, jumping from a low of $10.7 billion to a recent peak of $16.1 billion. This uptick shows rising interest from major investors, contributing to the recent surge in ADA’s price.  

Additionally, the number of profit-generating addresses has increased following ADA’s recent climb above $0.55, with approximately 2.4 million addresses, or 55%, currently in profit, while 42% of holders are experiencing losses. This could encourage investors to retain their holdings or even buy more, increasing the chances of a short-term pump.

Consequently, this scenario could lead to a significant drop in Netflow to its lowest negative level, as exchange reserves decline, reducing the likelihood of selling pressure.  

Buyers managed to push Cardano out of its downward trending channel and are now holding the ADA price well above the moving averages. However, sellers are defending further surges above $0.61 level. As of writing, ADA price trades at $0.592, declining over 1.9% from yesterday’s rate.

With the 20-day EMA trending upwards at $0.58 and the RSI declining from the overbought region, there’s a marginal advantage for sellers. However, should the price remain above $0.57, it’s probable that the ADA/USDT price could again test buyers’ patience at $0.62. If successful, we might see a potential breakout toward $0.69 level. However, this level will likely be dominated by bears.

On the other hand, a decline below the moving averages and $0.57 level could trap numerous bullish investors. This scenario might lead to a wave of panic selling, sending the price towards the robust support level at $0.47. However, this level might again witness a strong accumulation from bulls.

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Shayan is a digital nomad and a professional journalist. He delivers high-quality engaging articles to Coinpedia through his in-depth research and analysis.

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