Cardano (ADA) is one of the cryptocurrencies that rose the most in price in the last 30 days and remains above $1.
Thanks to this rally, the native cryptocurrency of the Cardano network was trading above $1.30, a level not seen for three years.
After reaching that maximum, ADA experiences bearish correction, a healthy movement for the growth of any assetbecause it allows new investors to buy and join, while others take profits. Those movements create a kind of firmer floor or support for the next bullish movements.
Currently, the price of ADA is $1.06, which represents 65% below $3.10, its all-time high (ATH) reached in 2021.
In this framework, many investors wonder if the asset has the momentum to reduce that gap.
From the point of view of technical analysis, the consolidation of this structure above $1 It is an indication that a bullish pennant is forming.
In trading, this figure represents a pattern that is characterized by a strong bullish movement, which would be the flagpole, followed by a period of consolidation of maximum and minimum that progressively narrow until they coincide at a point. Generally, once this convergence occurs, the movement tends to resolve in the direction of the previous trend.
That same figure is what is apparently forming in the ADA price, as seen in the following graph. TradingView:
Given this panorama, the big question is: where is the price of ADA going?
As seen in the chart below, Cardano is encountering strong resistance in the $1.30 area over the past two bull cycles.
A break of that level appears to be key for ADA to head towards $1.50 or $2, just as it did three years ago.
It is explained in Criptopedia, the educational section of CriptoNoticias, that the term resistance refers to an area that an asset cannot cross due to the psychology of the market. That is, every time the price approaches that level, traders take profits because they consider the asset to be overvalued.
It is important to clarify that levels that were once resistances can become supports (and vice versa).
What factors can drive cardano price?
Donald Trump’s victory in the United States presidential elections woke up investor interest in cryptocurrencies.
In fact, before the election results were known, the price of ADA was $0.30.
It so happens that throughout his campaign, the Republican leader defined himself as a “pro-cryptocurrency president” and, furthermore, He promised to promote friendly regulation to promote the growth of the sector in that territory.
For that reason, expectations are set on the direction the Trump administration takes with respect to digital currencies.
For James Foord, economist and leader of the investment group The Pragmatic Investor, the native currency of the Cardano network “could easily exceed $2 in the next month, but what happens next will depend on the cryptocurrency market in general.”
It is worth clarifying that ADA is part of the group of “dinosaur cryptocurrencies”, term that some analysts have recently begun to use to define the longest-lived currencies on the market that are once again capturing the attention of investors.
The analyst also emphasizes the changes in governance in this ecosystem and believes that it is Something positive is that ADA holders now have the right to vote on network decisions. “Decentralization helps differentiate Cardano from Solana and Ethereum, which I would label as quite centralized at the moment,” he opines.
Along these lines, the Hydra implementation stands out, a layer 2 solution that promises to process 1 million transactions per second (TPS) in that environment. “Cardano is arguably one of the fastest networks out there and opens the door to thousands of real-world applications that are now practical,” he explains.
This is a key factor because if there is more activity in decentralized applications (dApps), smart contracts and transfers, There will be greater demand for ADA and that will generate an upward momentum in its price.
Finally, it should be noted that the good performance of bitcoin (BTC) favors the digital asset market. What usually happens, historically, is that the good performance of the currency created by Satoshi Nakamoto attracts investors towards risk assets and that is why there is an increase in demand for other cryptocurrencies such as ADA.
Disclaimer: The views and opinions expressed in this article belong to its author and do not necessarily reflect those of CriptoNoticias. The author’s opinion is for informational purposes and under no circumstances constitutes an investment recommendation or financial advice.