ADA is the native token of the Cardano blockchain, and after being in a downward trend for the past three weeks, it is about to break the silence. Potential reasons for this bullish outlook include current market sentiment and the positive price movements ADA has shown in recent days.
ADA Technical Analysis
Since early December 2024, ADA's price has dropped over 40%, falling below the $1 level. However, with traders' and investors' attention, the altcoin's price seems to be recovering and gaining upward momentum.
Currently, ADA seems to be consolidating narrowly around a strong resistance level near $0.95. Based on recent price movements and historical momentum, if ADA breaks out of the consolidation zone and closes above $1 on the daily chart, it is likely to rise by 30% to $1.25 in the coming days.
Conversely, if the altcoin fails to close above this level and drops below the $0.85 mark, it may find support around $0.72 in the future.
On a positive note, ADA's relative strength index (RSI) is currently near the oversold area, suggesting potential upward momentum in the coming days.
ADA's social metrics
ADA's social dominance has slightly increased to 1.08%. Although the increase is not significant, it reflects the growing interest and discussion within the crypto community about Cardano.
Historically, higher social engagement is often associated with price movements. Additionally, sustained social dominance may indicate a revival of investor confidence, further driving price movements.
On-chain metrics support the bullish outlook for ADA.
This bullish outlook seems to attract long-term holders and traders. ADA's spot inflow/outflow data shows that exchanges witnessed a significant outflow of ADA tokens worth $98 million in the past week.
In addition to long-term holders, trader participation appears to have significantly increased. Data shows that ADA's open interest surged by 8%, indicating increased trader activity and hinting at potential upward momentum.
The current RSI reading is 41.29, indicating that ADA is approaching the oversold area. As selling pressure eases and buyers regain control, this indicator typically signals that prices are about to rebound.
Meanwhile, the MACD shows bearish momentum, but its histogram indicates that the bearish trend may be weakening. A potential crossover of the MACD line could further confirm the shift in bullish sentiment. Therefore, closely monitoring these indicators is crucial.
Will Cardano's price rebound by the end of the year? ADA needs to reach this level.
The key resistance level that may prevent Cardano's price from rising by the end of the year is around $1.0.
This is not only a psychologically significant key level, but also aligns with the downward trend of the annual high.
Once this level is broken, the likelihood of retesting the yearly high will significantly increase. However, for now, ADA remains in a technically downward trend, so traders should not be surprised if the market reverses lower again in the short term without a broader recovery in risk appetite. However, for those who can withstand short-term price fluctuations, 2025 is expected to be a remarkable year for major altcoins like Cardano.
The realistic target for this bull market is the 1.618 Fibonacci extension from the 2023 lows, which traces back to the historical high point in 2021, slightly above $3.0, close to $5.0.
This could mean that although Cardano has increased about three times from October levels, it could still rise five times from the current level.
Of course, many bulls predict that Cardano's price will rise faster, but no one can really be certain how high cryptocurrencies will go in the upcoming bull market.
This means that Cardano is a strong candidate for the most worthwhile cryptocurrency to buy at the moment. However, despite Cardano being around for years and having a large and dedicated community, the blockchain's level of adoption is still low, which is concerning.
In the cryptocurrency space, a better strategy is to diversify funds across different currencies rather than putting all eggs in one basket.