Cardano [ADA] has demonstrated remarkable strength, surpassing Bitcoin [BTC] in terms of performance during August.
One of the standout features has been ADA’s exceptional performance against BTC, placing it among the top five cryptocurrencies that have outperformed BTC.
This impressive performance suggests that Cardano could be on track for an uptrend as we head into the final months of the year.
Formation of Triple Bottom Pattern in ADA Price Action
An analysis of Cardano’s price action reveals a potential bullish setup on the daily chart. ADA seems to have established a strong support level at $0.32, forming a triple bottom pattern.
The first touch occurred during the market crash on August 5th, with subsequent touches reinforcing this support level, indicating a solid base for Cardano.
Furthermore, ADA is currently consolidating within a triangle pattern, with the triple bottom acting as a foundation. The descending trendline has been resistant to recent price increases, but a breakout above this pattern could drive ADA’s price higher.
By utilizing the Fibonacci retracement tool, a break and sustained move above the 50% retracement level would signify a change in sentiment, challenging the prevailing bearish trend of the past five months.
A successful breakout above the $0.37 level, along with consistent movement, would further support a bullish reversal.
If ADA reaches the 100% retracement level around $0.45, it would denote a complete reversal from the previous bearish phase.
Moreover, the cumulative volume index has been steadily rising, reaching $401 billion, signaling robust market participation and reinforcing the argument for higher ADA prices.
Analysis of Addresses by Time Held
Reviewing on-chain data, specifically addresses categorized by the duration of holdings, reveals that ADA’s long-term holders, commonly referred to as “Hodlers,” are optimistic about the future.
Hodlers, who have maintained ADA for over a year, are progressively growing in number, showcasing confidence in the asset.
The 30-day change in holder data indicates a modest increase of 0.68%, while there has been a 3.8% rise in traders holding ADA for less than 30 days, signaling renewed interest in short-term positions.
Observations on Cardano’s Open Interest
Cardano’s open interest in futures contracts at the $0.35 price level remains steady at $190.98 million.
This consistent open interest illustrates traders’ enduring confidence in ADA, with no significant fluctuations hinting at reduced interest levels.
According to Coinglass, the open interest chart has maintained stability since June 2023, reflecting a growing interest in accumulating ADA.
Current Market Sentiment Surrounding ADA
Market sentiment towards Cardano is currently split. While the general sentiment among the public leans bearish, institutional investors are bullish on ADA.
Historically, institutional investors tend to forecast market movements more accurately than the general public, which often enters trades after the optimal time. With this disparity in sentiment, now might be an opportune moment to consider trading ADA as market conditions improve.