- Cardano records a lucrative recovery rate amid a 20% rally over the last ten days.
- Transaction and technical data indicate a temporary surge to $1.26
- A 24hr candle close beneath $1 will cancel the bullish case with further declines.
Cardano (ADA) presents bullish signs. However, the resulting uptrend will likely persist because of the many obstacles in its road. Therefore, market players should be careful about ADA and the anticipated upside rally.
ADA Price Continues to Climb
Cardano’s price witnessed a 45% sudden drop from 20 Jan to 22 Jan as Bitcoin recorded similar actions. Though the alternative coin plunged beneath the psychological level of $1, it didn’t print a candle close under it. ADA saw a swift recovery beyond this level, rallying by 20% from its lows, and seems ready to keep the uptrend.
Though the uptrend appears impressive, it will encounter several hurdles in the upside journey. Furthermore, the run-up may fail to overcome the barrier at $1.26 because of the 50-day SMA.
Transaction data from IntoTheBlock’s GIOM model supports the ceiling thesis for ADA. The on-chain index suggests that almost 484,540 addresses that bought roughly 6.2 billion Cardano tokens at $1.27 average price remain ‘out of money.’
Therefore, any near-term buying momentum to push ADA into this zone will encounter colossal sell-side strength. Also, new addresses in the Cardano platform have dropped, supporting the temporary upside actions. The blockchain saw the crypto addresses plunging to 63,310 from 73,780 within the last month. The 14% fall shows market players are not interested in ADA at its current price levels.
Cardano encounters massive obstacles despite the bullish picture. Rejection from either of the zones might see ADA plummeting lower towards $1. A 24hr candle close under this obstacle will form a lower low, violating the bullish case.
For now, Cardano rides bullish waves after its 20% 10-day climb. However, transactional and technical metrics show the alt will hardly rise past $1.26. That is due to multiple hurdles plaguing the alt’s path. Nevertheless, ADA has to maintain beyond the $1 psychological level to maintain its bullish structure.
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