As of the latest data, Cardano [ADA] is currently undergoing trading activities within a range that has been established for the past three months. Recent analysis indicates that the Cardano NVT ratio has reached a peak unseen in the last five months, suggesting a potential overvaluation of the asset.
Despite the increasing NVT ratio, ADA has encountered strong resistance at the $0.366 mark for the past month. The cryptocurrency has struggled to surpass this level due to insufficient buying pressure.
Current Scenario of Cardano Price Movements
Since July, Cardano has been trading within a range of $0.393 to $0.311, with a midpoint at $0.352. This consolidation phase followed a downtrend experienced by the altcoin since March. Such a phase of consolidation within a range is deemed positive as it halts the downward trend and provides an opportunity for buyers to accumulate.
Fibonacci retracement levels were identified based on the decline observed between July and early August. The 50% retracement level at $0.366 has proved to be a major obstacle for the bulls throughout October, closely aligned with the midpoint level. The OBV indicator displayed consistent selling pressure, gradually declining over the past month.
Subsequently, the RSI indicator has been hovering around the neutral 50 mark, failing to indicate significant momentum in either direction.
The rejection from the 78.6% retracement level in September served as a cautionary signal on higher timeframes. To initiate a substantial rally, it is imperative for ADA to reclaim the $0.393 and $0.418 levels as crucial supports.
Caution for ADA Bulls to Avoid Potential Pitfalls
A notable liquidity zone was identified between $0.371 and $0.377 for Cardano. This price range may attract further price action towards it. Despite this, recent lackluster demand implies that a rejection from $0.375 could be more probable.
Potentially, a strong move from Bitcoin [BTC] may be necessary for Cardano to break out of its current range and establish an upward trend. At present, the likelihood of surpassing $0.4 seems low.
Disclaimer: The views expressed above are personal opinions and do not serve as financial, investment, or trading advice.