Cardano (ADA) has surged by more than 15% in the previous week, displaying strength despite a 27% decrease in trading volume within the last 24 hours. Although momentum indicators and whale activity remain optimistic, signs of consolidation are becoming apparent as ADA hovers around crucial support and resistance levels.
The future direction of ADA, whether it breaks higher or retraces, may hinge on its reaction to the critical $0.668–$0.709 range in the following days.
Is Cardano's Rally Slowing Down or Just Pausing?
The Cardano Average Directional Index (ADX) presently stands at 30.17, slightly lower than the previous day's 32.76, having sharply risen from 14.90 two days ago.
This swift climb indicates a strengthening trend that has recently stabilized, with the Cardano community holding Charles Hoskinson accountable for roadmap promises.
Despite a slight ADX pullback, ADA remains firmly in an upward trend, suggesting that bullish momentum persists, albeit potentially cooling off following a rapid acceleration.
The ADX, ranging from 0 to 100, is a trend strength indicator that does not specify direction, only the intensity of the trend. Readings below 20 indicate a weak or absent trend, while values above 25 typically confirm a strong trend.
The current ADX of 30.17 for ADA suggests a healthy ongoing uptrend, though the slight decrease hints that the trend's momentum is stabilizing rather than accelerating.
As long as ADA maintains this level, the uptrend remains intact, though traders should monitor any further ADX decline that might signify weakening strength.
Whales Come Back to Cardano—Is Accumulation Resuming?
The number of Cardano whale addresses, holding between 1 million and 10 million ADA, has slightly risen to 2,408 from 2,405 on April 22.
This uptick follows a brief decrease from 2,421 on April 20, indicating a minor but noteworthy return of larger holders after a brief distribution period.
While the change may seem marginal, it signifies a potential shift in sentiment among high-stakes investors, who can significantly influence price trends due to their substantial asset holdings.
Monitoring whale activity is crucial as these large holders have the power to impact the market significantly. Accumulation by whales is often seen as a positive signal of confidence, potentially predicting upward price movement.
The recent increase from 2,405 to 2,408 indicates a possible renewed interest among whales in accumulating ADA, suggesting a potential recovery or continued price strength if this trend persists.
ADA's Uptrend Strong, But Vital Support Must Hold
Based on its EMA lines, Cardano's price is still in an uptrend, with short-term moving averages above the long-term ones, indicating sustained bullish momentum.
This alignment suggests that the overall trend favors the bulls despite recent price consolidation.
However, ADA is trading within a narrow range, encountering resistance at $0.709 and support at $0.668, creating conditions for a potential breakout or breakdown.
If the $0.668 support is tested and breached, ADA could decline towards the subsequent support level at $0.634, with a further drop possibly pushing it down to $0.59, signifying a more substantial correction.
Conversely, a decisive breach above the $0.709 resistance is likely to reignite bullish momentum, with the next upside target estimated around $0.77.