Posted:
- ADA is down over 4% in the last 24 hours, but volume has increased.
- For ADA’s price to turn bullish, it needs to cross a resistance level near USD 0.64.
Cardano [ADA] witnessed a huge price increase in the past week, while its value increased by 30%. However, things have changed in the last 24 hours as the price registered a decline.
Is this the end of ADA’s bull rally, or should investors expect a trend reversal soon?
Cardano tests a support level
After a comfortable one-week rally, ADA witnessed a price correction. According to CoinMarketCapCardano fell by more than 4% in the past day.
At the time of writing, it was trading at $0.5576 with a market cap of over $14.6 billion, making it the eighth largest crypto.
While things may look bearish at first, things may soon turn in the token’s favor. Relt Capital, a popular X (formerly Twitter) handle that posts crypto analysis, pointed out that ADA was right on top of a key support level at $0.51.
Cardano successfully retests the orange level as support
So far, so good#ADA #Crypto #Cardano https://t.co/mCVMapZuNL pic.twitter.com/FvD4U2yFZ9
— Rekt Capital (@rektcapital) December 12, 2023
Once ADA tests that level, the possibility of the coin’s value rising further seems likely. However, as of now, the popularity of ADA has declined as evidenced by its social dominance.
Weighted sentiment also fell, indicating that negative sentiment dominated the market.
Nevertheless, ADA remained in demand in the Futures market, as evidenced its green Binance Funding Rate. It was also interesting to see a huge increase in blockchain development activity.
This showed that the developers have made more efforts to improve the network in the past week.
Source: Santiment
ADA must overcome these hurdles
To restart a bull rally, ADA will have to overcome quite a few hurdles. To that extent, AMBCrypto looked at Cardano’s liquidation heatmap to see when ADA faced issues.
Notably, the token’s liquidation rose sharply when its price reached the $0.56 mark, after which the price fell.
If the token rises above that level, ADA will witness a resistance level around $0.64 as the token failed to move above that range in the past week.
Source: Hyblock Capital
AMBCrypto then looked at other metrics to see if ADA’s price could gain bullish momentum in the near term. According to our analysis, ADA’s MVRV ratio recorded a decline after the peak on December 10.
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Its speed also started to slow down, meaning ADA was used less often in transactions within a given time frame. However, there was a positive benchmark ADA‘s Open Interest, which dropped.
A decline in the measure usually signals a trend reversal, giving hope for a soon price increase.
Source: Santiment