ADA, the native cryptocurrency of the Cardano ecosystem has underperformed in the recent market recovery. The Bitcoin price surged from $55000 to $68000 in the last two weeks has bolstered several major altcoins’ recovery of their loss from the June correction. However, the Cardano price analysis hints a key resistance is still intact before buyers regain control over this asset.
Cardano Price Analysis: Potential Breakout Looms as TVL Rises Amid Sideways Trading
Cardano Price Analysis| Tradingview
Amid the recent market recovery, the prevailing downtrend in Cardano price formed a lower low of $0.316 on July 5th. This bullish turnaround uplifted the asset by 44% to reach a $0.457 high but failed to surpass a downsloping trendline of the daily chart.
The dynamic resistance is part of a channel pattern formation that has carried a stable downtrend in ADA for the past three months. The two parallel trendlines still majorly influence the current price movement in the Cardano coin.
While the majority of major cryptocurrencies showcased a prolonged recovery since last week, the ADA price shifted sideways struggling to break channel resistance. This consolidation indicates pivot moment for this altcoin as a breakout or breakdown will signal the dominant force for the near term.
The Cardano price currently trades at $0.43, while the market cap holds at $15.4 Billion.
Despite the flat price movement, the Total Value Locked (TVL) in Cardano has seen a significant increase, rising from $172.78 million to $238.5 million—a 38% increase. This increase typically reflects an expanding adoption of decentralized applications (dApps) and the commitment of more capital to these protocols, indicating that users are increasingly willing to lock their assets in smart contracts.
ADA Futures Open Interest| Coinglass
Thus, the ADA buyers hold an opportunity to flip the overhead trendline into potential support for a higher rally, The post-breakout rally could push the asset to $0.52, followed by $0.56.
However, if the downsloping trendline persists the Cardano price analysis hints at another reversal within the channel pattern.
Technical Indicator:
RSI: The daily Relative Strength Index Slope at 54% projects a neutral to bullish sentiment among market participants.
BB Indicator: The uptick in the upper boundary of the Bollinger Band indicator suggests the buyers are active towards this asset.
Frequently Asked Questions (FAQs)
Total Value Locked (TVL) refers to the total amount of assets that are currently staked, locked, or deposited in a blockchain network’s protocols, often used as a measure of the overall health and growth of DeFi (decentralized finance) ecosystems
The Relative Strength Index (RSI) is a momentum oscillator used in technical analysis that measures the speed and change of price movements on a scale of 0 to 100.
A channel pattern in technical analysis is formed by drawing two parallel trendlines that frame the price movements of an asset. This pattern can be ascending, descending, or horizontal, indicating the direction of the market trend.
Related Articles
✓ Share:
Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
