Cardano [ADA] has emerged as a standout performer over the past week, registering a remarkable surge of over 114% before encountering strong resistance.
The sudden upward movement caught many traders by surprise, propelling the price from its consolidation range around $0.42 to challenge the crucial $0.70 level.
However, the momentum has subsided recently, with ADA experiencing a retracement of 14% within the last 48 hours. Such a significant pullback indicates profit-taking by traders at higher price points following the recent upsurge.
ADA Looking at Potential Consolidation
Based on CryptoCrypto’s analysis through IntoTheBlock, ADA’s short-term outlook presents a mixed scenario.
The volume of large transactions for the altcoin has dropped by 24% in the past day, signaling decreased institutional involvement after the rapid price hike.
For the time being, major stakeholders in the ADA ecosystem seem to be adopting a cautious approach while monitoring market dynamics and price movements at these critical resistance levels.
Moreover, active addresses have declined by 25%, hinting at a minor slowdown in network engagement for ADA.
These metrics typically suggest a cooling-off period might be necessary before the next significant price action for the digital asset.
Strong Support Indicators
Despite the recent pullback, data from Coinglass liquidations have pointed towards a potentially positive future outlook. A substantial level of liquidations has been observed at $0.65, indicating the presence of roughly $1.96 million worth of ADA liquidity.
This considerable cluster of orders could serve as a robust support zone, potentially thwarting further downward movements.
Stay Cautiously Hopeful!
Technically, ADA’s price trends have broken out of a descending triangle pattern that spanned multiple weeks, a pattern usually considered bullish.
Although facing resistance at $0.70, the formation of higher lows signals a continued bullish market structure for ADA.
If ADA manages to hold these levels, a renewed attempt at surpassing the $0.70 mark might be on the horizon soon.