Cardano has emerged from a descending channel today on the one-hour chart, pressing Cardano ADA against the 61.8% retracement level at $1.69. It is a positive development that virtually assures the digital asset will close above the 2018 high at the price of $1.39 for the first time in four consecutive monthly attempts. It also raises the probability of a Cardano bullish transition from the May volatility.
In the latest weekly report of CoinShares Digital Asset Fund Flows, digital assets saw net institutional outflows for the second consecutive week report, totaling $97 million and marking a net record for outflows. To provide perspective, it represents just 0.2% of total assets under management and pales in comparison to the total YTD inflows of $5.5 billion.
The weekly report did show altcoin inflows totaling $27 million, with Cardano ADA registering the largest institutional inflows at $10 million. It was the second consecutive week of Cardano ADA inflows, lifting YTD inflows to $24 million for Cardano institutional investment products. Coinbase exchange suggested that the ADA bullish inflows may “represent investors actively choosing proof of stake coins based on environmental considerations.”
On May 25, Cardano's ADA price released from an inverse head-and-shoulder pattern level on the four-hour chart, but it failed to cultivate emotion and commitment among Cardano ADA investors, leading to a pullback. Yesterday, the retreat undercut the right shoulder low at a price of $1.43, voiding the pattern.
The Cardano ADA pullback forged a descending channel on the four-hour chart, reaching support level around the 2018 high at $1.39 before staging today’s upside breakout. Cardano's price is currently resting on the 200 four-hour SMA at a price of $1.62 and just below the 61.8% retracement level of the May correction at $1.69.
The renewal in Cardano ADA price strength will first find resistance at a cluster of price congestion going back to May 7, around $1.79-$1.89. Further resistance level emerges at the junction of the 78.6% retracement at a price of $1.99 with the psychologically important $2.00.
With patience, Cardano's price should revisit the all-time high at $2.51, representing a 50% gain from the ADA price at the time of writing.
If ADA closes the week below the 2018 high at a price of $1.39, it could press ADA to revisit the May 24 low at $1.23.
Environmental considerations have captured the interest of cryptocurrency investors due to the notable impact mining has on the earth. Musk was instrumental in creating the message when he decided that Tesla would no longer accept Bitcoin BTC as a payment method because of the tremendous power usage, primarily derived from fossil fuels. For Cardano ADA, an ecosystem designed to be environmentally friendly, the awareness is an ADA bullish inflection point for their growth. It will reinforce ADA's relative strength in a period of broader market volatility.
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