Cardano (ADA) slowly but surely: Analysis of January 31, 2024

Cardano experienced an increase of nearly 180% at the end of 2023 and has started this new year in the red. Let’s look at the upcoming prospects for the ADA price.

Cardano (ADA) Situation

Cardano has generated significant buying interest at the support level of $0.24. Indeed, it was from this level that its price took off, reaching $0.68 in less than two months. During this period, Cardano surpassed its former resistances around $0.41 and $0.42. Currently, it seems that the Cardano price is forming a double bottom. This corresponds to a technical pattern suggesting a bullish reversal. Following this strong rise, Cardano underwent a correction of 33%, moving from $0.68 to $0.45. It is interesting to note that this last level corresponds to the 50% Fibonacci retracement, calculated from the last increase.

So far, demand for the ADA token appears to be higher than supply, with a current price of around $0.51. However, the recent drop has led its price below the 50-day moving average, which could indicate a potential trend reversal. This change encourages investors to be more vigilant. As for oscillators, they reflect the decreasing bullish momentum of Cardano, currently positioned below the median line. From an optimistic perspective, this could suggest that the cryptocurrency is currently undervalued. However, from a more pessimistic angle, it could also be interpreted as a sign that ADA’s momentum is heading towards a bearish trend.

The current technical analysis was conducted in collaboration with Elie FT, an investor and trader passionate about the cryptocurrency market. Today, he is a coach at Family Trading, a community of thousands of self-account traders active since 2017. You will find Live sessions, educational content, and mutual help around financial markets in a professional and warm atmosphere.

Focus on Derivatives (ADAUSDT)

The open interest in Cardano perpetual contracts drastically dropped during the overall cryptocurrency market crash at the beginning of the year. This drop was accompanied by forced liquidations, amounting to about $3.8 million. More recently, the open interest for ADAUSDT has stabilized and then began to rise again after bouncing off the $0.45. Given this market direction reversal, we can infer that traders’ interest has been predominantly on the buying side.

The Cardano liquidation heat map indicates that the cryptocurrency is situated between two zones of liquidations. Below the current price, we can note $0.37. Above the current price, we note $0.59 – $0.61 and slightly higher at $0.64. As the price approaches these levels, a massive triggering of orders could occur, thus increasing the possibility of a period of heightened volatility on Ethereum. These zones thus represent crucial points of interest for investors.

Hypotheses for Cardano (ADA) Price

• If the Cardano price holds above $0.45, we could anticipate a bullish continuation up to its last peak at $0.68. The next resistance to consider, if the bullish trend continues, would be $0.90 and even the psychological threshold of $1. At this stage, it would represent an increase of over 100%.

• If Cardano’s price fails to maintain above $0.45, we could envision a return to the $0.42 – $0.41 range. The next support to consider, if the bearish trend continues, would be around the levels of $0.38. At this point, it would represent a decrease close to -25%.

Conclusion

Cardano has drawn buyer interest, leading to a significant rise in its price, which bodes well for the token’s future. Is this positive momentum due to its recent developments or its sixth-place ranking in terms of market capitalization in the cryptocurrency sector? What is certain is that it will be crucial to carefully observe the price’s reaction to the various key levels to confirm or refute the current hypotheses. It is also important to remain vigilant against potential “fake outs” and market “squeezes” in each scenario. Finally, remember that these analyses are based solely on technical criteria, and cryptocurrency prices can otherwise quickly evolve based on more fundamental factors.