Cardano [ADA] has demonstrated remarkable resilience, recently exceeding Bitcoin [BTC] in performance throughout the month of August.
The impressive performance of ADA compared to BTC has been a standout feature, positioning it among the top five digital currencies that have outperformed BTC.
This superior performance suggests that Cardano may be gearing up for higher price levels as we progress into the final months of the year.
ADA price movement forms triple bottom pattern
An analysis of Cardano’s price trend reveals a potential bullish setup on the daily chart. ADA seems to have established strong support at the $0.32 level, forming a triple-bottom pattern.
The initial touch happened during the market downturn on August 5th, with subsequent touches reinforcing this support level, signaling a robust base for Cardano.
Moreover, ADA is consolidating within a triangular pattern, with the triple-bottom formation acting as the groundwork. The descending trend line has been impeding recent price peaks, but a breakout beyond this pattern could drive ADA to higher levels.
By utilizing the Fibonacci retracement tool, a breach and maintenance above the 50% retracement level by ADA would indicate a shift in sentiment and nullify the prevailing bearish sentiment that has dominated the market for the past five months.
A successful breakout above the $0.37 threshold and sustained upward movement would further validate a bullish reversal.
Should the price advance to the 100% retracement level, around $0.45, it would signify a complete overturn of the prior bearish trend.
Furthermore, the cumulative volume index has been on a steady rise, reaching $401 billion, underscoring strong market participation and bolstering the argument for a surge in ADA prices.
Wallet activity based on holding duration
An inspection of on-chain data, specifically focusing on wallets categorized by holding duration, reveals that long-term ADA holders, commonly referred to as “Hodlers,” are exhibiting a positive outlook for the future.
Hodlers, individuals who have retained ADA for over a year, are progressively growing in number, showcasing confidence in the asset.
The change in holder data over a 30-day period indicates a modest uptick of 0.68%, while holders with positions under 30 days have experienced a 3.8% rise, indicating renewed interest in short-term positions.
Cardano futures open interest
The open interest in Cardano futures contracts at the $0.35 price point remains steady at $190.98 million.
This consistent open interest level indicates that traders are maintaining trust in ADA, with no significant fluctuations hinting at waning interest.
According to Coinglass, the open interest chart has displayed stability since June 2023, reflecting growing interest in accumulating ADA.
Market sentiment around ADA
Finally, the market sentiment regarding Cardano is divided. While the general sentiment among the crowd leans towards bearish, institutional investors express a bullish stance on ADA.
Typically, institutional investors tend to foresee market movements more accurately than the general public, which often enters trades belatedly. With this disparity in sentiment, now may be an opportune moment to consider a trade on ADA as market conditions evolve.