Cardano’s ADA token has gained a remarkable 35% to reach $0.63 as founder Charles Hoskinson aims to influence cryptocurrency policies in the United States.
While investors are excited after this rally, ADA may find it difficult to make further gains due to the significant resistance level around $0.60. Furthermore, technical indicators such as the high RSI and widening Bollinger Bands are pointing to a possible correction in ADA’s price.
Cardano’s Rise Fueled by Regulatory Expectations
Following major statements made by Charles Hoskinson, the price of ADA has risen to its highest level in the last few months. On November 9, Hoskinson announced plans to cooperate with legislators on cryptocurrency regulation in the United States under a potential Trump administration during an X podcast. This statement attracted the attention of investors, leading to a sharp increase in the price of Cardano.
The Impact of Regulatory Developments on the Crypto Market
Investors have long argued that regulatory clarity and market stability are key catalysts for cryptocurrency adoption. Hoskinson’s proactive approach suggests that the Cardano Foundation aims to have a greater say in crypto regulation. “I will be spending more time with legislators in Washington DC…” Hoskinson said, adding that he plans to take an active role in Cardano’s future policy decisions.
Market Dynamics and Overbought Situation
ADA price is currently trading at $0.56 and the market is showing signs of overheating. ADA, which has gained 35%, seems to be in an overbought state that could lead to investors feeling burnt out. The Relative Strength Index (RSI) is currently at 78.79, a clear indication that ADA has entered the overbought region.
A high RSI usually indicates that an asset is due for a correction. This indicates that the market is becoming saturated with buyers and a price pullback may be imminent. Furthermore, if the price is trading above the upper Bollinger Band, this is another indicator that ADA’s rally has been overextended and that such increases are usually followed by a bear trend.
Technical Analysis: Levels to Watch
ADA is currently trading just below the critical resistance level at $0.60, which is a key point for the altcoin’s future direction. If selling pressure increases and the price pulls back, strong support can be found at $0.54. If this level is broken, deeper declines could continue down to the psychological level around $0.40.
Cardano’s Future Perspective
On the other hand, if buying interest continues and ADA breaks the $0.60 resistance level, the altcoin could rally towards the $0.81 level it reached earlier in the year. This potential increase could be possible due to the increased investor confidence and the positive regulatory environment due to the initiatives led by Hoskinson.