7 December 2023
An analyst has explained how Cardano may be heading towards a rally to $0.75 soon if the historical pattern is anything to refer to.
Cardano Could See A Rally Of Over 70% In The Near Future
As explained by analyst Ali in a post on X, ADA currently appears to be mirroring the same pattern as that between 2018 and 2020. Below is the chart shared by the analyst, which points out this similarity.
From the graph, it’s visible that ADA had been in a phase of consolidation inside a channel back between 2018 and 2020, and it would appear that the asset has been ranging in a similar fashion recently as well.
There is one dissimilarity present between the two patterns, however, and that is the presence of the COVID-19 crash. This price plunge below the consolidation channel only happened because of the emergence of an anomaly in the form of the virus, though, so it might be safe to ignore it in the grand scheme of things.
Cardano has recently observed a rally towards the upper end of the channel and the cryptocurrency is now trying to break out of it. Back during the previous consolidation period, a similar break took place, and it ended up leading to a very significant uplift for the cryptocurrency.
“If this pattern holds, we could see ADA punching through the $0.45 resistance soon,” notes Ali. As for what trajectory the asset would follow after this break, the analyst thinks that a rally towards the $0.75 level could potentially happen by “late December.”
From the current spot price, such a surge would mean an increase of more than 70% for Cardano. If the previous instance of the trend is anything to refer to, though, the rally would perhaps not end at just these gains, as ADA in fact eventually ended up registering a total increase of almost 3000% in the bull run that followed then.
The on-chain analytics firm Santiment also discussed about ADA yesterday, revealing a possible instigator behind the latest price uptrend in the asset. The relevant metric here is the total number of ADA addresses carrying some amount of balance.
The below chart shows how this indicator’s value has changed over the last few months:
As displayed in the chart, the total number of Cardano wallets observed a sharp decrease last month and what occurred alongside it was a rally in the price. In recent days, another decline in the indicator has taken place, although the scale is much smaller this time around.
“Typically, declining wallets is a sign of small holders capitulating & selling to whales at a loss,” explains the analytics firm. ADA has observed an increase in the past few days, so it’s possible that this effect may be in action once more.
ADA Price
Cardano has again been rejected from the $0.45 resistance mark as its price has pulled back to $0.43 since the retest.