Cardano ADA price swept the swing low formed on May 19 during the recent sell-off, creating a bottom. Although ADA price has risen considerably from this local low, more upside seems to be on the table.
However, on-chain metrics indicate that the upswing will not be easy.
Cardano's price slid 30% after the recent sell-off, setting up a local low at a price of $1.01. Since hitting this level, Cardano ADA has risen nearly 24% to where it currently stands, $1.243. The so-called “Ethereum killer” is set to rise to $1.451, just below the 50% Fibonacci retracement at $1.481.
However, this upswing will need to slice through the resistance level at a price of $1.327 to hit $1.451. If ADA produces a decisive 4-hour close above the price of $1.481, it will likely tag the supply zone, ranging from $1.525 to $1.624.
Adding credence to the bull rally is the uptick in new addresses joining the network from 786 to 968 between June 20 to 22. This 23% increase reveals the pattern that investors are interested in ADA at the current price.
While Cardano ADA price is likely to revert to the mean, IntoTheBlock’s Global In/Out of the Money (GIOM) model shows that the price uptrend will be a tough journey.
Roughly 215,000 addresses that purchased 3.91 billion ADA at an average price of $1.33 are “Out of the Money.”
Similar clusters of underwater investors are present up to $1.88. Therefore, the bullish momentum needs to slice through these barriers to have any chance of hitting the intended target.
A sudden spike in selling pressure at $1.327 could hinder the upswing. Therefore, investors need to keep a close eye on the large transaction metric. This on-chain index track transfers worth $100,000 or more and transaction has risen from 2,500 to 4,540 in the past four days.
Often an increase in large transactions coincides with local tops therefore, the recent bump in this on-chain index indicates that a potential sell-off pressure could be on its way.
If Cardano ADA price slices through the recently set up swing low at $1.01, it will invalidate the bullish thesis. In such a case, ADA might retest the local bottom at $0.92 formed on April 23.
0 Comments