Warning: The results of the following analysis are the author’s opinions only and should not be considered investment advice
- ADA formed a multi-month parallel channel pattern
- A bullish ADA could reach the channel midpoint at 0.3042
Cardano [ADA] It has been under heavy selling pressure in recent days, but the bulls are rising to the challenge. At press time, it was swinging green, indicating that the bulls were buying ADA at a discount.
Read Cardanos [ADA] Price forecast for 2023-24
It should be noted that ADA’s slight bullish momentum was also consistent with it Bitcoins [BTC] bounce After breaking the $16.73 thousand level. A bullish BTC could also push the ADA bulls to reach the midpoint of this channel.
Multi-month parallel channel: will the trend continue?
ADA price action has formed a bearish parallel channel pattern since August. At the time of writing, its price is near the lower end of the trading range, but in a slight bullish momentum.
Technical indicators indicate that conditions are ripe for a continuation of the bullish momentum and a convincing price reversal. For example, the Relative Strength Index (RSI) has been oversold since the past four days, with a slight uptick at the time of publication. This indicates that a reversal may be imminent as the accumulation continues, adding to the buying pressure.
On Balance Volume (OBV) has also increased, indicating increased trading volume that may increase buying pressure.
Therefore, ADA could push higher and target the channel midpoint at 0.3042. But first, the bulls must overcome the immediate hurdle around $0.2670. If they did, a smooth ride to the middle of the canal would be possible.
However, a breakout of the channel, especially after $0.2309, would negate the above biases.
Finally, increased development activity makes investors confident in Cardano
recent increase in ADA development activities It did not immediately lead to a price change, as investors had a negative view of the asset. However, that was changing, according to Santiment data. Weighted sentiment eased from the lower negative range, indicating that investors were softening their stance on the asset.
Also, the number of active addresses (red bars) has increased dramatically in the last 24 hours. This indicates that more accounts were trading ADA, resulting in higher trading volume (small white bars). Could these factors create the perfect conditions for a price reversal and an upward ADA trend?
However, a bearish BTC may invalidate the above predictions.