Key Cardano takeaways
- Cardano’s ADA, now the third largest cryptocurrency by market capitalization, retains its top position as it sustained its uptrend for three days in a row.
- The uptrend in the ADA / USD exchange rate is a breakout of its earlier descending triangle range.
- This increases the pair’s potential to hit $ 1.50 in the upcoming sessions.
Ethereum’s top rival Cardano is in tears.
The blockchain platform’s native asset, ADA, rose as much as 52 percent after hitting a low near $ 0.95 earlier this week. As of Wednesday, the token made an intraday high of $ 1.45 before being revised slightly to the $ 1.35-1.44 area during Thursday’s Asia-Pacific session.
Traders flocked to the Cardano market after Bitcoin began a lower correction after hitting its record high above $ 61,000.
ADA offered an ideal haven against the top cryptocurrency after being listed on Coinbase Pro, a US-based trading platform for digital assets. Further bullish tailwinds for ADA were due to the ongoing craze for non-fungible tokens (NFTs). With Cardano, users can create the said assets on their blockchain after the last upgrade of “Mary”.
Technical indicators added to the bullish confluence. The recent uptrend in the ADA / USD exchange rate had broken out of a descending triangle. Traders see a bullish continuation pattern in this structure, especially when the downward consolidation comes after a strong upward move. ADA traded higher before it formed the triangle.
Typically, a breakout move resulting from a falling triangle structure will cause the asset to increase by the maximum distance between the structure’s top and bottom trendlines. In the case of ADA, the length is about $ 0.47. Adding $ 0.47 to the level from which the token broke the triangle, the breakout target approaches $ 1.50.
“It is important to note that theThe outlook was determined by the Moving Average Convergence Divergence ( ), ”Said analysts at CoinGape, a crypto-focused YouTube channel. “The tendency has moved to positive territory, suggesting that the path with the least resistance is up. “
“Next to theThe line goes over the signal line, which is a different one Signal, ”they added.
On the flip side, the ADA / USD relative strength indicator on the four-hour chart has entered overbought territory. This increases the likelihood that the pair will adjust less to neutralize short-term buying sentiments. Should a correction occur, Cardano risks a correction to the flipped resistance area of $ 1.26 to $ 1.29.
Fundamental risks also threaten to reverse the upward trend of ADA. The Cardano token has rallied strongly, largely due to the restriction of its rival Ethereum as a blockchain project. The latter suffers from higher gas and transaction fee issues, but remains keen to resolve them by the end of this year with a long-awaited protocol upgrade from proof-of-work to proof-of-stake.
One industry observer noted that unlike Ethereum, which boasts with projects like Tether and UniSwap, it still has to see a single popular application on the Cardano blockchain. This makes ADA’s recent profits more speculative and volatile.