Cardano Hits Bottom? What You Should Consider Before Rushing Into ADA
Cardano managed to enter the top 5 cryptocurrencies by market cap and take the number 4 position, not including USDT. The cryptocurrency has seen important appreciation in 24 hours (5%) and during the past week (25%) following an explosion in its ecosystem.
Related Reading | Cardano’s Ecosystem Explodes, Why ADA Could Be Quick To Resume Bullish Trend
As of press time, ADA trades at $1.47 as it bounces up its lows in the 4-hour chart.
ADA trends to the upside in the 4-hour chart. Source: ADAUSDT Tradingview
Cardano was heavily impacted by recent months price action in the crypto market. After reaching an all-time high north of $2,20, the cryptocurrency lagged and dipped back into its critical support zone just above $1.
Economist Michaël van de Poppe believes ADA has begun an upward trend after bouncing back from the lows with continuation but could yet present a buying opportunity. The analyst has been bullish on ADA for a while and believes $1 will remain critical support.
As seen below, Cardano (ADA) has constantly bounce back from these levels on every major dropped including March and July 2021 when the entire crypto market saw a crash of over 50%.
ADA’s critical levels in the daily chart. Source: Michaël van de Poppe via YouTube
At the moment, ADA’s price approaches resistance near $1.53 and could yet give traders an opportunity to take a long position. Van de Poppe claimed the following on Cardano’s potential future price action:
If you want to get into Cardano and you didn’t really get the chance you were looking for (…). In that case, we are looking at long entries at the lower boundaries so around $1.3. We are looking at support here on a daily timeframe.
On lower timeframes, van de Poppe believes traders shouldn’t be chasing positions, but $1.41 could provide an “aggressive” opportunity to take a long. In that sense, Cardano must break above $1.55 to continue its bullish momentum.
Cardano Experiences Ecosystem Explosion
Even if ADA manages to break above the aforementioned resistance, the price could form a consolidation zone above those levels which could present a more efficient opportunity to take a long position. Should Cardano sustain those levels, its price could start targeting former highs at around $2 and $2.33.
Although Cardano has been trading with more strength than some of the other cryptocurrencies in the market, Bitcoin must maintain its current levels or trend upside to prevent ADA for re-testing its support levels. At the moment, Bitcoin seems to be leaning for more downside for the short term.
ADA’s recent bullish price action seems to have been driven due to a growth in the number of projects building on the network. As NewsBTC reported a week ago, there are currently over 200 projects leveraging the network smart contract capabilities.
Related Reading | Cardano Set To Enter The Babbage Era After Alonzo HFC Milestone
Source: Input Output Media via Twitter