Cardano (ADA), one of the top cryptocurrencies by market cap, has recently seen a notable price surge. Over the past few weeks, ADA’s price has risen steadily, gaining the attention of crypto enthusiasts and investors. With the digital currency reaching its highest levels since April, many are now questioning whether this momentum can carry Cardano to the $0.90 mark. Let’s explore the current market trends, on-chain data, and key price levels that might influence ADA’s next move.

Recent Price Performance and Key Levels

Cardano’s value has been on an upward trend, showing a 42% increase over the past week to reach around $0.50. However, the price saw a slight dip, currently stabilizing at approximately $0.55. This fluctuation comes as Cardano reclaims its position among the top 10 cryptocurrencies by market capitalization, surpassing notable competitors like Tron.

Despite the brief pullback, Cardano’s recent rally has many investors optimistic about its future. The cryptocurrency has entered a consolidation phase, where the price has been trading within a tight range. This period of consolidation is often viewed as a precursor to a significant price breakout, where the value could either surge upwards or face a correction.

On-Chain Analysis Highlights Two Key Levels:

1. $0.2 as a Critical Support Level: On-chain data indicates that if ADA were to drop to $0.2, nearly 540,000 Cardano addresses would be facing unrealized losses. This scenario could trigger a wave of selling, as investors may look to cut their losses, leading to increased selling pressure and potentially driving the price even lower.
2. $1.99 as a Major Resistance Level: Conversely, a surge to $1.99 would put around 726,000 addresses into profitability. This point would likely see a significant amount of profit-taking, as investors aim to capitalize on their gains. The resulting sell-off at this level could create resistance, making it harder for ADA to push beyond this price point.

These two levels, $0.2 and $1.99, are important markers that could determine Cardano’s price trajectory in the coming weeks. Investors will need to keep an eye on these price points as they could signal major buying or selling activity, affecting the coin’s overall market performance.

Technical Indicators Suggest a Breakout

As ADA consolidates, various technical indicators are hinting at a potential breakout. One such indicator is the Bollinger Bands, which have been tightening on the 4-hour price chart. Tightening Bollinger Bands typically suggest reduced volatility and an imminent price movement. When the bands narrow, it often indicates that the price is gearing up for a significant move in either direction.

If ADA breaks above its current resistance level of $0.65, it could pave the way for a new upward leg, with the next target set at around $0.90. Achieving this level would represent a substantial increase from its current trading price, signaling a continuation of the bullish trend.

Additionally, the Money Flow Index (MFI), which measures buying and selling pressure, is currently at 37.97. This level indicates that there is still room for upward movement without reaching overbought conditions. An MFI below 50 suggests that buying pressure could increase, potentially pushing the price higher.

Average True Range (ATR), another key indicator, shows a decrease in market volatility. Lower volatility could be a sign that ADA is preparing for a sharp price movement, further supporting the possibility of an upcoming breakout.

Changing Investor Behavior: What It Means for ADA

Recent data shows shifts in the behavior of Cardano’s investors. Long-term holders, those who have held ADA for over a year, have been steadily increasing. This group’s consistent holding pattern reflects strong confidence in Cardano’s potential, as they are less likely to sell during short-term price fluctuations.

On the other hand, mid-term holders (those holding ADA for 1-12 months) have seen a 5.78% decrease over the last month. This drop suggests that some investors are choosing to cash out after the recent price rally, possibly locking in profits or reallocating their investments.

Interestingly, the number of short-term traders (those holding ADA for less than a month) has surged by 36.47%. This rise indicates a growing interest in ADA’s short-term price movements, likely driven by the anticipation of a breakout. The increase in short-term trading activity could add to the volatility, making ADA’s price movements more dynamic in the near term.

What’s Next for Cardano?

The key to ADA’s next move lies in breaking past the immediate resistance level of $0.65. If the cryptocurrency can sustain upward momentum and breach this barrier, a rally toward $0.90 could be on the horizon. However, traders should also be cautious of potential sell-offs at critical levels, such as $1.99, where profit-taking could stall further gains.

Overall, Cardano’s market outlook remains optimistic, with strong support from long-term holders and increased activity from short-term traders. As the market continues to monitor these key levels, investors will be watching closely to see if ADA can sustain its recent momentum and push towards new highs.