Cardano (ADA) has recently witnessed a remarkable surge in price, soaring by 60% following a six-week struggle in a downtrend.
The recent revelation of the US President Donald Trump's inclusion of Cardano in his Crypto Reserve played a crucial role, propelling ADA above the $1 mark for the first time in over a month.
Investors in Cardano have managed to recoup their losses, with the MVRV Long/Short Difference indicator indicating a substantial increase. The surge in profit margins for long-term holders (LTHs) signifies a solid foundation for price stability in the cryptocurrency realm. By choosing to hold onto their ADA holdings rather than selling, LTHs are ensuring minimal price drops and facilitating upward price movements.
This behavior, coupled with the recent surge, highlights the confidence of long-term holders in ADA, reinforcing the bullish momentum of the cryptocurrency.
The spike in profits for long-term investors reflects a strong belief in the asset's future potential, hinting that the current rally may be the start of a sustained uptrend rather than a short-lived price spike.
Despite the Relative Strength Index (RSI) for Cardano entering the overbought zone, an indication usually associated with potential price reversals, past data for ADA suggests that such instances have historically led to continued upward momentum rather than a reversal. This implies that despite the overbought signal, Cardano could persist in its upward trajectory.
As Cardano's price currently stands at $1.06, marking a significant recovery from its prolonged struggle below the $1 mark, the strength of the market's response to Trump's announcement is evident. Surpassing the $1 mark is not just a numerical milestone but a psychological indicator for traders and investors alike.
The breakthrough beyond $1 signifies the possibility of further rallies for ADA. To sustain its upward movement, Cardano must establish $1.00 as a steadfast support level. Failure to do so might result in a loss of momentum and a regression to lower price levels.
In the scenario where Cardano falters in upholding support at $1.00, a decline towards the next significant support level at $0.85 could derail the optimistic outlook and hinder potential recovery. Conversely, maintaining stability at $1.00 would reinforce the current rally and lay the groundwork for additional price advancements.