A seasoned Analyst believes a bullish reversal may be on the Horizon for ADA, but it must first break a critical resistance level.
Cardano’s ADA has enjoyed a positive start to the new year, finding support at the $0.24 price point and printing only green candles on the daily chart. However, prominent technical analyst Duo Nine has asserted that the token may not be out of the woods yet in a recent analysis for CryptoPotato.
According to Duo Nine, ADA has to break the $0.30 resistance before the latest rally can be called bullish. According to the analyst, if it fails to do so, the latest move could be seen as a relief rally and a potential bull trap.
As highlighted by Duo Nine, Cardano’s trading volume has not shown significant changes despite the positive price action. However, indicators like the MACD and the RSI have flashed bullish signals, with a bullish cross on the MACD on New Year’s Eve and a bullish divergence on the RSI after the price fell to a yearly low last month.
It is worth noting that ADA’s price has taken a significant beating in the current bear market. The Cardano native token’s price has plummeted over 81% year-to-date and over 91.8% from its $3.08 all-time high per data from CoinGecko.
The poor price performance comes despite the increasing development activity on the Cardano chain that has seen it hold on to the top spot in terms of development activity twice in as many years per Santiment’s ranking.
Recall that a recent Santiment analysis suggested that the cryptocurrency may be undervalued, as reported by The Crypto Basic. The report cited whale and shark accumulation, as well as seller exhaustion, as potential bullish signals.
ADA is trading at the $0.254 price point at press time, up 0.10% in the last 24 hours.