As a seasoned analyst with over two decades of experience in the financial markets, I have seen my fair share of market trends and patterns. The recent performance of Cardano (ADA) is particularly intriguing, given its striking resemblance to the 2021 bull run.
The digital currency, Cardano (symbolized as ADA), has been soaring on a robust bullish surge since November, boosted by the election of a pro-crypto figurehead in the U.S. Currently, it’s showing signs of re-evaluating its position at the upper boundary of a megaphone weekly chart configuration. This megaphone pattern typically exhibits a sequence of higher highs followed by lower lows. As a result, it forms two distinct trend lines: one for providing support and another for setting resistance levels.
ADA Holds $1 Support Level
Over a span of three days, ADA, with a fully diluted market capitalization of approximately $45.5 billion and an average daily trading volume of around $4.4 billion, dropped roughly 25%. During the mid-afternoon session on Tuesday in London, this significant cryptocurrency was priced at about $1.01. Currently, it stands at a price of $1.02, despite experiencing a steep decline of 9.43% within the past day.
Extreme price fluctuations in Cardano’s market have resulted in over $24 million being wiped out through liquidations. The majority of these liquidations were instigated by traders holding long positions. Additionally, the drop in Cardano’s Futures Open Interest (OI) has surpassed 26%, currently standing at approximately $832 million.
In the current market conditions, Cardano is serving as a reliable refuge for numerous investors and traders in the crypto world. A significant portion of its activity might be due to the rotation of crypto funds away from Bitcoin. Here’s a brief snapshot of Bitcoin’s current status:
If a significant number of investors (around 93,000) bought approximately 2.5 billion units of ADA when its value was roughly $1.2, it’s clear that Cardano has been performing well recently. However, to prevent any further decline and potential fall to the $0.81 mark, it’s crucial for the altcoin to hold onto its current support level around $1.
Over the past three days, significant investors (whales) bought approximately 120 million ADA tokens, valued at around $144 million. This action suggests they believe in a potential price surge for Cardano in the near future. Wallets containing between 100 million and 1 billion ADA coins have increased their investment in the cryptocurrency.
Between December 3rd and 6th, as per Santiment, these whales boosted their holdings from approximately 3.15 billion tokens to around 3.27 billion tokens.
Cardano TVL and Other Activities Resembles 2021 Bull Market
Around the same time, Cardano’s TVL reached $735.7 million, up from yearly lows of $200 million.
This graph represents a new peak (all-time high or ATH) for the Cardano network, exceeding its prior record of $494 million set in March 2024. Moreover, user activity on the network experienced a significant increase by three times, and the trading volume on Decentralized Exchanges (DEXs) reached their highest levels this year.
According to data from Artemis, the trading volume on Cardano’s decentralized exchanges (DEX) reached approximately $1.8 million prior to the US elections. More recently, this figure has surpassed $30 million and is currently ranging between $25 million and $27 million.
Based on its current trajectory, ADA might potentially reach up to $8. However, crypto analyst Lark Davis, with a positive outlook, predicts that the altcoin may even touch $10 during the ongoing bull market.
According to the analyst’s report, they pointed out a significant 213% increase in monthly value and robust technical signals as reasons for their confidence. In the short term, Javon Marks predicts that ADA’s price might rise to approximately $2.77, with possible further increases reaching up to $5.296 or even $7.82.
In my analysis, I’ve identified a striking resemblance between the current 2021 bull run and Ali Martinez’s perspective. Notably, he previously pointed out that Cardano’s price movement seems to be mirroring a fractal pattern aligned with the 2020/2021 bull cycle.
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2024-12-10 15:19