The rise of Cardano (ADA) price above $1 earlier this month confirmed the onset of the macro bullish outlook after being trapped in bearish sentiment since September 2021.
Amid the ongoing cryptocurrency market correction, triggered by the Bitcoin price BTC $93 905 24h volatility: 1.5% Market cap: $1.86 T Vol. 24h: $28.13 B drop below $94K, Cardano price ADA $0.68 24h volatility: 4.2% Market cap: $24.48 B Vol. 24h: $705.13 M has suffered a similar setback. The large-cap altcoin, with a fully diluted valuation of about $38.9 billion and a 24-hour average trading volume of about $832 million, has slipped more than 30 percent in the last three weeks to trade about 87 cents on Monday, December 30, during the mid-London session.
From a technical analysis standpoint, Cardano’s price has been forming a megaphone bullish structure since mid-December 2023. With the recent rally towards $1.3, Cardano’s price invalidated the dominant 2024 correction, which began in mid-March.
Furthermore, Cardano’s price, in the weekly time frame has consistently closed above the 50 Moving Average (MA). Additionally, ADA price has seen its weekly Relative Strength Index (RSI) rally above the 80 percent level for the first time since the third quarter of 2023.
In the daily time frame, however, Cardano price has been forming a potential reversal pattern described by a head and shoulders (H&S) construction, coupled with a bearish divergence on the RSI indicator. With the Cardano price having consistently closed below the 50-day MA, the altcoin is well positioned to drop below 80 cents towards the next support range between 68 cents and 77 cents.
#Cardano $ADA most significant support zone is between $0.77 and $0.68! pic.twitter.com/ARRtHdzWoY
— Ali (@ali_charts) December 30, 2024
Favoring Cardano Fundamentals
Since the re-election of Donald Trump in the United States earlier last month, Cardano has been among other crypto projects that have significantly benefited. Moreover, Trump has vowed to tap into the cryptocurrency industry to revamp the US economy during his tenure, which begins in a few weeks.
As Coinspeaker previously reported, Cardano founder Charles Hoskinson has been actively involved in the expansion of ADA adoption in a regulated manner in the recent past. In addition to Hoskinson’s involvement in Trump’s crypto agenda, the Cardano network has been seeking to expand to Argentina following the involvement with President Javier Milei.
As a result, the Cardano network has grown to a respectable layer one (L1) blockchain, with over $433 million in total value locked (TVL) and over $22 million in stablecoins market cap. The introduction of Cardano’s decentralized governance through the Chang Hard fork has significantly helped increase the overall confidence in the ADA’s DeFi ecosystem, backed by institutional investors.
According to on-chain data analysis provided by Santiment, the Cardano whales, with a balance of between 1 million and 10 million coins, have purchased more than 20 million ADA coins in the past two days. Consequently, the Cardano whales now hold nearly 6 billion ADA tokens.
In addition with the close to 22 billion ADA coins staked to secure the network, the overall supply is gradually decreasing, which is majorly bullish in the long haul.
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