Cardano (ADA) appears to be bullish. However, the uptrend seems to experience a limitation as there are possibilities of several obstructions in its way. Thus, traders need to be cautious around the ADA coin and its forthcoming rally.
What is Cardano?
Cardano is a PoS (Proof of Stake) blockchain that is open-source and distributed. Cardano implements peer-to-peer transactions using its native token, ADA. The crypto project was developed in 2015 and released in 2017 by the former Co-Founder of Ethereum, Charles Hoskinson.
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Also, Cardano is popularly known as the “Ethereum Killer” as it attempts to solve issues related to the Ethereum blockchain.
ADA provides a versatile, sustainable, and scalable network for deploying smart contracts. Using Cardano, you can develop and deploy an extensive array of dApps (decentralized applications), crypto coins, games, and other projects.
Cardano Price Continuously Appreciates
ADA price experienced a 45% downtrend between the 20th and 22nd of January, a similar experience to Bitcoin. Even though ADA dipped beneath the $1 psychological level, it didn’t create any candlestick lower than that. However, it quickly regained from this level. The ADA token leaped by 20% from its bottom price and signals that this uptrend will be consistent.
ADA ready for takeoff | Source: ADAUSD on TradingView.com
Although this uptrend is worth considering, the coin will encounter several obstructions in its way. On the contrary, this upswing appears to be limited near the $1.22 level, and this is because of the 50-day SMA (Simple Moving Average).
IntoTheBlock’s Global In/Out Model
The transaction data gotten from the GIOM (Global In/Out of the Money) model reinforces this capping thesis for ADA’s price. The Global In/Out of the Money model, an on-the-chain trading index, displayed that about 484,540 addresses bought circa 6.2 billion ADA coins at the regular price of $1.26, and they were “Out of the Money” transactions.
Image Credit: IntoTheBlock
Thus, any day-trading purchasing pressure that rallies Cardano (ADA) into this region will encounter an enormous bearish pressure.
Also projecting that this upswing will be short-spanned is decreased number of new coin addresses entering Cardano’s mainnet from 73,780 to about 63,310 within the past month. It’s worthy to note that this 14% decrease signifies that ADA traders are less interested in the coin’s prices at its present levels.
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Notwithstanding the buying pressure Cardano (ADA) faces, any denial at both levels can cause the altcoin to trade as low as $1.
Image from Coingape, charts from IntoTheBlock and TradingView.com
