Cardano [ADA] experienced a significant breakout last week, with an impressive 43.3% increase from the lowest point on Monday, reaching $0.4587. Recent reports also indicated a notable 32% rise in whale transactions, reflecting increased interest in Cardano and heightened demand. Notably, trading volume has surged above average levels during this rally.
Opportunity in Cardano Price Dips
Since August, Cardano has been trading within a range between $0.313 and $0.394. In late September, it attempted to surpass the range high by reaching $0.418 but was met with resistance. Similarly, Bitcoin [BTC] faced rejection around its $66.2k resistance level during the same period.
In the latter half of October, ADA’s decline brought it back to the lower end of the range. By November 4th, both the CMF and MACD signaled a lack of significant capital inflows and a bearish momentum.
However, following the recent rapid gains, the indicators have reversed course. The CMF now stands at +0.26, its highest level since February, indicating strong bullish momentum. The OBV is also approaching its August peak, which remains unbroken since. Additionally, the MACD shows a robust bullish outlook.
Anticipating a Liquidity Search before the Next Major Move
An analysis of the liquidation map identified $0.422 and $0.44 as key levels with substantial liquidation concentrations. Notably, the cumulative short liquidations at $0.44 are higher. A potential rebound to $0.44 could attract more long positions, enhancing liquidity in the market.
Subsequently, a retracement towards $0.422 or lower could help gather this liquidity before Cardano prepares for its next price action. Technical analysis suggests that a breakthrough above $0.457 is imminent, with long-term targets set at $0.5 and $0.57.
Disclaimer: The content provided is for informational purposes only and should not be regarded as financial advice. All opinions expressed are those of the author.