Cardano (ADA) is a blockchain-based platform that enables developers to create decentralized applications (dApps) and smart contracts. Created by Charles Hoskinson, one of the founders of Ethereum, to address some of the scalability and interoperability issues faced by existing blockchain networks.
Over the years, ADA has gained a lot of attention in the crypto community due to its potential. However, in recent times many investors and traders have been wondering about the next step for crypto amidst the uncertainty in the crypto market.
Cardano (ADA) Possible Bullish Breakout
In the past week, Cardano (ADA) has experienced some significant bearish price movements. The asset dropped almost 20% in the last 7 days with the price falling to around $0.38. This bearish trend can be attributed to several factors including the ongoing downtrend in the market.
Despite the bearish trend, according to the asset’s price chart, ADA may be ready for a bullish breakout. In the 1-day timeframe, Cardano has just tapped into an order block which suggests a probable reversal (upward movement).
An order block is basically the last bullish or bearish candlestick before the formation of any significant movement in the market. It refers to a price level where a large number of buy or sell orders are bundled, creating a significant level of support or resistance.
Large institutional traders, hedge funds, or other market participants placing large buy or sell orders at a specific price level create order blocks. An identified order block at a specific price level may indicate that the price bounces from that level and moves in the opposite direction.
In this case, ADA could form an upward reversal given that the asset is tapping into the order block in the $0.37 range. While it is uncertain when ADA will perform the reversal, it could happen soon given the accuracy in the chart.
Meanwhile, the ADA bears seem exhausted as at the time of writing this article, the asset has only dropped by 0.2% in the last 24 hours. ADA is currently trading at $0.38, slightly above the identified order block price level.
If ADA continues in the opposite direction upwards and does not invalidate the marked order block, the price of ADA could reach major highs such as the one in the $0.46 zone.
Fundamentals that could contribute to ADA’s breakout
Aside from technical details, Cardano also has some fundamental data that could be part of its possible bullish breakout. One instance is the Snowmantastic NFT project transitioning from the Ethereum network to the Cardano network.
Snowmantastic has worked on over 200 projects in the industry. The transition to Cardano could drive a significant number of investors into this ecosystem and thus increase the native token’s price in the long term.
In the Cardano network, we already see a similar scenario where the accumulation of ADA is increasing. According to a chart shown by popular crypto analyst Ali Chart, the number of large transactions on Cardano reached 4,000 on April 1.
By April 13, the transactions had risen to almost 5,000. The analyst noted,
“Large ADA transactions are increasing as institutional actors and whales take steps, indicating that Cardano network activity is increasing. It’s a bullish sign that supports the ADA uptrend!”
Featured image from iStock.com, chart from TradingView
