Cardano (ADA) has demonstrated a strong performance, with over a 10% increase in the last 24 hours, elevating its market capitalization to $26.5 billion. The trading volume has also surged by 50%, reaching over $900 million, indicating a growing interest and activity in the cryptocurrency.
As ADA embarks on an initial uptrend, technical indicators like ADX and EMA suggest a mounting momentum with the potential for a bullish breakout. Despite this positive trend, a continuous decline in large ADA wallets over six days raises concerns, hinting at a possible mismatch between the price movement and the behavior of significant holders.
The Average Directional Index (ADX) of Cardano has climbed to 18.08 from 14.88 in a day, indicating a strengthening trend. This rise in ADX aligns with ADA's budding uptrend as higher lows emerge on the chart, signaling underlying momentum development.
While a breakout in price is yet to materialize conclusively, the increasing ADX hints at a potential impending significant move, especially when accompanied by a bullish market structure. The ADX, a key technical indicator, measures the strength rather than the direction of a trend. A reading below 20 signifies a weak or sideways market, while values between 20 and 25 suggest the formation of a trend.
Cardano's ADX nearing the critical 20 threshold signifies a possible strengthening uptrend if it continues to rise above it. The decline in the number of ADA whale wallets holding between 1 million and 10 million ADA over six days while ADA forms an early uptrend may indicate caution for short-term momentum.
Observing the movements of large holders is vital as their actions can significantly impact price direction. A sustained decrease in whale activity, particularly during an uptrend, may imply profit-taking, lowered confidence, or asset rotation, potentially limiting ADA's upward potential.
Additionally, Cardano's Exponential Moving Average (EMA) lines tightening suggest a prospective golden cross formation, a bullish signal indicative of the short-term EMA crossing over the long-term EMA. Breaking above the $0.73 level could pave the way for testing resistances at $0.746 and $0.774.
An established breakout may target $0.80, fostering broader bullish momentum for ADA in the short run. Conversely, failing to sustain the uptrend could lead ADA back to support levels at $0.69, with further downside risks towards $0.66 and $0.60, potentially descending to $0.511 in a pronounced downtrend, marking its lowest level in over two months.