Cardano Finally Flashes Buy Signal After 50% Nosedive
Different technical and on-chain metrics are flashing buy signals for Cardano after it suffered a 50% correction.
Key Takeaways
- Cardano returned to price levels not seen since the beginning of the summer.
- Despite the massive losses incurred, buy signals are beginning to pop up.
- A spike in buying pressure behind ADA could see it rise to $0.093.
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Following a month-long corrective period, Cardano looks poised to rebound and possibly resume the uptrend seen before the Shelley upgrade.
Cardano Flashes Buy Signals
Cardano took a 50% nosedive after making a new yearly high of $0.155 in late August.
The massive losses incurred over the past month saw this altcoin drop to its 200-day moving average, which is now serving as support. Although many investors are still reluctant to jump back into the market, different metrics suggest that the so-called “Ethereum killer” is poised to rebound.
The TD sequential indicator is currently presenting a buy signal on ADA’s daily chart. The bullish formation developed as a red nine candlestick, leading to a one to four candlesticks upswing.
But if the buying pressure behind Cardano is strong enough, it could mark the beginning of a new upward countdown.
Such a bullish thesis holds when looking at Cardano’s network growth. Market participants seem to be buying substantial amounts of this token due to the spike in new daily addresses.
Today, nearly 6,000 new addresses are joining the network daily, representing a 5% jump within the past four days.
The recent higher high in this on-chain metric can be considered an extremely optimistic signal as it shows an increase in user adoption over time. Network growth is often regarded as one of the most accurate price foreshadowers.
Usually, when the network expands for a prolonged period, rising prices tend to follow.
Stiff Price Resistance Ahead
On its way up, Cardano may find significant resistance between $0.082 and $0.085. IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model shows that roughly 11,000 addresses had previously purchased over 1 billion ADA around this price level.
Such a massive supply barrier may have the ability to absorb some of the buying pressure behind this cryptocurrency.
If this hurdle fails to keep rising prices at bay, the smart contracts tokens could advance towards $0.093.
Here, more than 17,000 addresses are holding 1.2 billion ADA.
It is worth noting that despite all the bullish signs that Cardano presents, prices currently sit on top of weak support.
The IOMAP cohorts show that 8,600 addresses bought only 274 million ADA between $0.079 and $0.081. Therefore, slicing through this supply wall may jeopardize the bullish outlook and lead to more significant losses.
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