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HomeCrypto NewsAnalysisCardano Network Activity Spikes: Is $0.85 the Next Stop?

Cardano Network Activity Spikes: Is $0.85 the Next Stop?

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Will Cardano (ADA) bounce back as it hits the $0.73 support level for a falling wedge breakout rally?

As the crypto market stands on extremely volatile grounds, altcoins hang at crucial support levels. With the altcoin total market cap hanging at $1.22 trillion, Cardano is taking support near $0.73.

This support level has acted as a critical pivot in the past, making it a key area to watch for potential price action. With a minor slowdown in selling volume, is the ADA price ready for a breakout rally?

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Cardano Analysis

In the daily chart, the ADA price trend reveals the downfall in Cardano, testing a crucial local support trendline. The declining trendline converges near the $0.73 support level.

With several lower price projections, the underlying support at a relatively lower level compared to the recent swing high suggests the potential for a reversal.

BITSTAMP:ADAUSD Chart Image by Trojan69420

However, as buyers failed to sustain the momentum, ADA fell by 8.56% last night, creating another bearish engulfing candle. Thus, the pressure over the support trendline has significantly increased.

This signals growing uncertainty among traders, with bearish sentiment outweighing bullish attempts. If buyers step in, a strong reversal could quickly shift the momentum.

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Furthermore, the downfall has stretched under the lower Bollinger Band, increasing the chances of a prolonged crash.

Cardano Whales Hesitate To Buyback

As Cardano stands at a crossroads, the altcoin fails to find support from whales. As reported yesterday, ADA Whales offloaded 330 million tokens during the market crash.

Image

However, the whales have yet to buy back their tokens. This lack of whale accumulation adds to the bearish outlook, raising concerns about sustained buying pressure in the near term.

NVT Ratio Signals a Potential Bullish Reversal

Amid the recent downfall, the 90-day adjusted Network Value-to-Transaction (NVT) ratio gives a bullish signal. The NVT ratio has dropped from 5.32 on November 23, 2024, to the current ratio of 1.61, indicating a sharp decline.

This significant drop reveals a surge in transaction activity, hinting at increased adoption and growing on-chain activity within the Cardano network.

Furthermore, the decline in the NVT ratio often serves as a leading indicator of an upcoming price jump, as it reflects that the asset is becoming undervalued relative to its transaction volume.

Cardano NVT Ratio
Cardano NVT Ratio

ADA Price Targets

With a slight increase in the chances of a bullish reversal, Fibonacci levels point to a critical price level near $0.8567. This level marks the 23.6% Fibonacci retracement, which aligns with the local resistance trendline.

The trendline forms a falling wedge pattern with the support trendline, typically signaling a bullish breakout. Thus, a potential recovery could be underway as buyers gradually gain strength.

On the flip side, if ADA closes below $0.73, it will likely test the $0.60 support zone. A break below this level could trigger a sharp decline, signaling a deeper correction phase for ADA.

DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

Author

Albert Brown
Albert Brownhttps://thecryptobasic.com/
Albert Brown is a cryptocurrency investor and journalist who has been in the nascent space since 2017. His love and passion for technological innovations made him delve deeper into the world of blockchain and cryptocurrencies. As a journalist, Brown has written on several crypto-related topics that have been referenced by popular industry players like Tyler Winklevoss, Binance CZ, etc.

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