Cardano’s [ADA] resurgence continues as it jumps 14% in just a span of four days. Regardless of whether it’s a hype cycle or not, ADA is gaining momentum, propelling it into a prominent FOMO territory.
Even though ADA is still trading 75% lower than its all-time high currently, could history be gearing up to replicate a similar rally to that of 2021?
Analyzing the chances
Similar to many digital currencies, Cardano is currently below its post-election peak, struggling to maintain crucial psychological thresholds. The rapid fluctuations in its price have left investors anxious, positioning it as a high-risk, high-reward investment. Following its retreat from $1, ADA has experienced three consecutive lower lows, underscoring its downward trend.
Observing the recent trend of whales offloading over 70 million ADA tokens in the past 96 hours, the likelihood of breaching the critical support range at $0.70–$0.65 is increasing.
The significant sell-off indicates that the recent double-digit surge in ADA’s value might just be another cycle driven by hype, susceptible to rapid manipulation and profit-taking. A period of consolidation within this range could potentially set the stage for a bullish repeat of ADA’s remarkable performance in 2021 when it peaked at an astounding $3.10 – a remarkable 630% surge year-to-date.
However, amidst growing uncertainty in market sentiment, Cardano remains highly volatile, leaving ADA’s next trajectory shrouded in uncertainty.
What Lies Ahead for Cardano?
Given the elevated volatility of Cardano, it continues to pose a risky venture – at least for the time being. Despite some signs of relief in the ADA/BTC pairing, it still has a long way to go to reclaim its previous highs essential for a true recovery.
Simultaneously, a substantial liquidity pool with 10x long leverage at $11.60 is at risk of being wiped out, with ADA precariously hovering just 12% above the crucial $0.69 level.
Given the high stakes involved, a reiteration of the remarkable 2021 rally appears to be a distant possibility. For ADA to surpass $1 again, maintaining its current levels is pivotal.
Otherwise, amidst considerable sell-offs, heightened volatility, and potential long squeezes, the altcoin might be on the brink of exploring new support levels on the charts.