Key Cardano Takeaways
- Cardano’s ADA, now the third-largest cryptocurrency by market capitalization, maintains its top rankings as it sustains its uptrend three days in a row.
- The ADA/USD exchange rate’s uptrend comes as a breakout-move of its previous Descending Triangle range.
- That raises the pair’s potential to hit $1.50 in the coming sessions.
Ethereum’s top rival Cardano is on a tear.
The blockchain platform’s native asset, ADA, surged by up to 52 percent after bottoming out near $0.95 at the beginning of this week. As of Wednesday, the token has formed an intraday high of $1.45 before correcting mildly lower to the $1.35-1.44 range during the Asia-Pacific session Thursday.
Traders flocked into the Cardano market after Bitcoin started correcting lower upon establishing its record high above $61,000.
ADA offered an ideal refuge against the top cryptocurrency after its listing on Coinbase Pro, a US-based digital assets trading platform. More bullish tailwinds for ADA came from the ongoing craze surrounding non-fungible tokens, or NFTs. Cardano allows users to create the said assets on its blockchain following its latest “Mary” upgrade.
Technical indicators added to the bullish confluence. The ADA/USD exchange rate’s latest move upside had it broke out of a Descending Triangle. Traders see the said structure as a bullish continuation pattern, primarily if the downside consolidation occurs after a strong move upward. ADA was trading higher before forming the Triangle.
Typically, a breakout move emerging out of a falling triangle structure leads the asset higher by as much as the maximum distance between the structure’s upper and lower trendline. In ADA’s case, the length spans about $0.47. If one adds $0.47 to the level from where the token has broken the Triangle, then the breakout target comes near $1.50.
“It is essential to note that the said analysts at CoinGape, a crypto-focused YouTube channel. “The trend has crossed into the positive region, suggesting that the least resistance path is upward.”outlook has been validated by the Moving Average Convergence Divergence ( ),”
“Besides, theline leads the way above the signal line, which is another signal,” they added.
On the flip side, the ADA/USD’s Relative Strength Indicator on the four-hour chart has entered the overbought territory. That increases the pair’s likelihood of correcting lower to neutralize short-term buying sentiments. Should a correction appear, Cardano risks correcting to its flipped resistance area of $1.26-1.29.
Meanwhile, fundamental risks also threaten to reverse ADA’s bullish course. The Cardano token has rallied majorly because of its rival Ethereum’s limitation as a blockchain project. The latter suffers from higher gas and transaction fees issues but remains committed to solve it by the end of this year through a long-awaited protocol upgrade from proof-of-work to proof-of-stake.
One industry observer commented that he still has to see a single popular application operating atop the Cardano blockchain, unlike Ethereum, which boasts about projects like Tether and UniSwap. That makes ADA’s latest gains more speculative, prone to wavering.