The cryptocurrency market has witnessed a tumultuous period in recent months, with Cardano (ADA) facing its fair share of challenges. 

Following a peak in mid-March, ADA, the 10th largest cryptocurrency by market capitalization, experienced a downward trend, shedding approximately 43.5% of its value. This decline occurred amidst a broader crypto market downturn triggered by Bitcoin’s dip below a critical support level of around $60,500 on Wednesday.

However, amidst this period of weakness, Cardano’s price has shown signs of stabilization, indicating potential bullish momentum, particularly evident in its recent sideways movement. Notably, this strength has been partly attributed to significant purchases by whales, as recently highlighted by data from crypto analytics firm “IntoTheBlock.” According to the firm, Cardano whales have been particularly active, with an average daily transaction volume of $13.84 billion over the past week.

Additionally, data from analytics firm Santiment further supports this observation, revealing a consistent increase in holdings among addresses containing between 100,000 and 100 million ADA since early April.

Adding to the optimism, on Thursday, crypto analyst Ali Martinez highlighted the TD Sequential, a technical indicator that has historically provided accurate signals for market reversals. Notably, the indicator identifies potential trend reversals in financial markets by generating buy or sell signals based on exhaustion points in existing trends.

The TD Sequential, which timed the Cardano top, now presents a buy signal on the ADA daily chart. It anticipates a one to four daily candlesticks rebound that could put an end to the ADA corrective phase.” Wrote Martinez.

On Friday, the pundit further highlighted historical trends, suggesting that ADA’s recent 50% price drop could present a favorable buying opportunity.

“Cardano seems ready for a parabolic bull run! Observing historical trends, the 50% price drop ADA faced in the past month could be a golden opportunity. In 2019, Cardano consolidated within a parallel channel, signaling an end to the bear market. Following the stagnant phase, $ADA broke out of the channel with a 75% surge, then underwent a 56% price correction, setting the stage for an impressive 4,095% bull run. History doesn’t repeat itself, but it often rhymes!” he wrote, emphasizing a similar pattern in 2023.

Other analysts have also weighed in on ADA’s short-term prospects. Analyst “Chill Trader” suggested a possible short-term bounce near the ‘near term support zone’ around $0.44 following ADA’s recent downtrend from its local peak. Similarly, analyst “Sssebi” highlighted significant support at the $0.40 level for ADA, pointing out bullish signals on both daily and weekly charts. 

Sssebi further pointed out ADA’s ability to maintain strength despite challenges elsewhere in the market serves as a “mega bullish indicator,” potentially setting the stage for a significant rally.

At press time, ADA was trading at $0.46, reflecting a 2.07% surge over the past 24 hours.

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Filed under: Bitcoin - @ May 3, 2024 7:23 pm