- Market sentiment around ADA remained bearish.
- In addition to an upward trend, some indicators suggest a slight increase in prices.
Cardano (ADA) Investors have been disappointed over the past few months, with the token suffering a major setback in April. However, there were chances of the trend changing in the coming days as a bullish trend was emerging on the daily chart of the token.
Cardano’s bloodbath
The month of April brought bad news for the token, as its price dropped drastically on the 12th of that month. To be precise, the token lost more than 40% of its value during the crash.
Since then, the token has not done enough to recover from this setback. AMBCrypto’s take on IntoTheBlock data found that more than 60% of investors were out of money, meaning they were at a loss.
As its price crashed, people started talking about ADA more, as evidenced by the sharp increase in its social volume since April.
Its weighted sentiment remained largely in the negative zone, suggesting that bearish sentiment around the token was dominant.
Source: Santiment
But the token’s daily chart gave hope of a recovery in the coming days as a bullish falling wedge pattern appeared on its daily chart. Since the price dropped, the token has consolidated inside the pattern.
At press time, it was on the verge of exiting the model, which could soon lead to a full recovery.
Source: TradingView
Is Cardano Recovery Possible?
AMBCrypto then analyzed ADA’s on-chain metrics to see if they supported the possibility of a recovery. We observed that the token’s MVRV ratio dropped sharply after the price crash.
But over the following weeks, the indicator improved, suggesting a potential rebound in the coming days. Additionally, the speed of ADA also remained high.
This meant that ADA was more often used in transactions within a defined time frame.
Source: Santiment
Since the metrics appeared bullish, AMBCrypto checked Cardano’s daily chart to see if technical indicators were also hinting at a bullish rally. We have seen that Chaikin Money Flow (CMF) has seen a promising rise.
This indicates that the chances of a price rise were high. Nonetheless, the Relative Strength Index (RSI) has gone the other way, which may prevent ADA from moving higher.
Source: TradingView
If ADA price gains bullish momentum in the coming days, it would be crucial for the token to surpass $0.467 as the liquidation would increase sharply.
Realistic or not, here is Market capitalization of ADA in terms of BTC
An increase in liquidations often leads to price corrections.
A successful breakout above the bar would allow ADA to reach $0.5, which would be the first step towards a full recovery. At press time, ADA was trade at $0.4609 with a market capitalization of over $16 billion.
Source: Hyblock Capital
News Source : ambcrypto.com
Gn bussni
