Cardano (ADA), the native cryptocurrency of the Cardano blockchain, has been experiencing a prolonged phase of consolidation in recent weeks. For the past several weeks, ADA’s price has been trapped within a narrow range, fluctuating between $0.69 and $0.75. During this time, the token has faced several fakeouts, causing confusion among traders and investors trying to gauge its next move. However, technical analysis suggests that ADA could soon see a breakout, depending on whether it can overcome key resistance levels.

Technical Analysis and Key Levels to Watch

At present, ADA is consolidating near the upper boundary of its current range, with the price sitting at approximately $0.742 at the time of writing. The token has been struggling to break through the $0.75 level, which has acted as a significant resistance point. In addition to the $0.75 resistance, the 200 Exponential Moving Average (EMA) on the daily timeframe has also been preventing any major upward movement. This technical indicator has provided consistent resistance, further hindering ADA’s ability to rally higher.

However, despite these obstacles, ADA remains in a neutral stance, as it is neither showing clear bullish nor bearish signals. The key to unlocking the next major move lies at the $0.76 level. If ADA manages to break through this resistance and closes a daily candle above this level, a 13% rally could be on the horizon. This move could see ADA pushing toward the $0.85 level in the coming days, making it a crucial price point for traders to monitor closely.

ADA’s price has also formed a tightening pattern, with the Bollinger Bands on the 12-hour timeframe showing signs of a squeeze. This typically indicates that a sharp price movement could occur soon, either to the upside or downside. The narrowing of the bands suggests that market participants are waiting for a catalyst to drive ADA’s price in one direction. Traders are closely watching this formation, as it could signal the end of the current consolidation phase.

Current Price Momentum and Market Sentiment

At press time, ADA has recorded a modest 0.25% price increase in the past 24 hours, bringing it to a price of $0.742. Despite the slight uptick, the trading volume has dropped by 18%, suggesting that market participants are currently hesitant to commit to large trades due to the asset’s high volatility. This low volume indicates that many traders are waiting for more definitive price movement before entering the market.

Despite this period of consolidation, ADA is seeing some positive signs from the on-chain data. Whale and long-term holder activity remain optimistic, with large holders continuing to accumulate the token. According to data from Coinglass, exchanges have seen an outflow of $13.75 million worth of ADA tokens in the past 24 hours. This outflow signals that larger investors are choosing to hold onto their ADA rather than selling, which could help reduce selling pressure on the market. Reduced selling pressure combined with an eventual price breakout could contribute to an upside move for ADA.

Potential Risks and Bearish Outlook

While there are bullish signals, there are also risks to consider. ADA’s consolidation phase could continue if it fails to break above the $0.75 resistance. In the event that ADA’s price drops below $0.69, the consolidation phase may extend further, and the token could face a more significant downturn. Traders should keep an eye on the $0.75 and $0.76 levels, as breaking these resistance levels would signal the start of a potential rally. Conversely, failing to hold above these levels could lead to more downside pressure.

Conclusion

Cardano (ADA) is currently in a neutral consolidation phase, hovering between $0.69 and $0.75. The key to ADA’s next move lies at the $0.76 resistance level. A successful breakout above this level could send the price to $0.85, marking a 13% rally. While whale activity and long-term holders show optimism, low trading volume indicates uncertainty among market participants. As the Bollinger Bands squeeze and the price action remains tight, ADA’s next move could come soon, and traders should be prepared for potential volatility.