- Market sentiment around ADA remained bearish.
- Apart from a bull pattern, some numbers pointed to a price increase
Cardano [ADA] disappointed investors in recent months when the token suffered a major setback in April. However, there were chances that the trend would change in the coming days when a bullish pattern appeared on the token’s daily chart.
Cardano’s Massacre
The month of April brought bad news for the token as its price dropped drastically on the 12th of that month. To be precise, the token lost more than 40% of its value during the crash.
Since then, the token hasn’t done enough to recover from that setback. AMBCrypto’s look at IntoTheBlock’s facts found that more than 60% of investors ran out of money, meaning they suffered losses.
As the price dropped, people started talking more about ADA, which was evident in the sharp increase in social volume since April.
Weighted sentiment remained largely in the negative zone, indicating that bearish sentiment around the token was dominant.
Source: Santiment
But the token’s daily chart gave hope for a recovery in the coming days, as a bullish descending wedge pattern appeared on the daily chart. Since the price dropped, the token has consolidated within the pattern.
At the time of writing, the pattern was close to an exit, which could soon lead to a full-fledged recovery.
Source: TradingView
Is Cardano’s recovery possible?
AMBCrypto then analyzed ADA’s on-chain metrics to see if they supported the possibility of recovery. We found that the token’s MVRV ratio fell sharply after the price crash.
But the metric improved in the coming weeks, signaling a possible rally in the coming days. Moreover, the speed of ADA also remained high.
This meant that ADA was used more often on transactions within a certain time frame.
Source: Santiment
With the metrics looking bullish, AMBCrypto checked Cardano’s daily chart to see if technical indicators were also pointing to a bull rally. We found that the Chaikin Money Flow (CMF) showed a promising rebound.
This indicated that the likelihood of a price increase was high. Nevertheless, the Relative Strength Index (RSI) took the other route, which may keep the ADA from moving higher.
Source: TradingView
If ADA’s price gains bullish momentum in the coming days, it would be crucial for the token to break above $0.467 as liquidation would rise sharply.
Realistic or not, here it is The market cap of ADA in BTC terms
An increase in liquidation often results in price corrections.
A successful break above the line would allow ADA to reach $0.5, which would be the first step towards a full recovery. At the time of writing, ADA was trade at $0.4609 with a market cap of over $16 billion.
Source: Hyblock Capital