Cardano [ADA] gains 17% since July low, bullish momentum builds

Cardano [ADA] has been on a slow upward trend, with a 17% gain since hitting a low of $0.536 in early July, currently trading at $0.626. However, the weekly chart indicates a bearish market structure, with the price retesting the 78.6% Fibonacci retracement level at $0.535 in mid-June. This bearish trend is further supported by a series of lower highs and lower lows formed since December. Despite this, investors can remain hopeful for a recovery as long as the 78.6% level holds as support. If this level flips to resistance, the price could drop by another 30%-40%.

On the 1-day chart, a bullish structure is in place, with the price forming higher lows and higher highs over the past two weeks. The Relative Strength Index (RSI) has crossed above the neutral-50 mark, indicating a momentum swing from bearish to bullish. The On-Balance Volume (OBV) has also been creeping higher, suggesting steady demand. This bullish momentum could see Cardano rally to the $0.68 supply zone, with a breakout beyond $0.68-$0.7 indicating strong bullish conviction. However, on-chain metrics suggest a lack of conviction, with development activity trending lower since February and reduced on-chain activity. The 180-day circulation and daily active addresses have also been muted, indicating a slide in unique ADA transactions. Until organic demand returns, a Cardano recovery may be difficult.

Traders can expect a move to $0.66-$0.68, especially if the Bitcoin trajectory remains bullish. However, a breakout past the $0.68 resistance would be challenging, and traders and investors may want to stay sidelined until ADA manages to break out beyond that supply zone. The Cardano Foundation has allocated $15 million to enhance network adoption, aiming to drive growth and increase the utility of the ADA token. Despite these efforts, the price of ADA has remained relatively stagnant, highlighting the challenges faced by the cryptocurrency in achieving sustained price appreciation. The foundation's investment in adoption efforts is a strategic move to bolster the ecosystem and attract more users, which could potentially translate into long-term price gains.

Analysts have predicted a significant rally for Cardano, with some forecasting a 150% increase in its value by 2025. These predictions are based on various factors, including the network's technological advancements and growing adoption. However, it is important to note that these are speculative forecasts and should not be taken as guaranteed outcomes. The actual performance of Cardano will depend on a multitude of factors, including market conditions, regulatory developments, and the success of the foundation's adoption efforts. The recent price stabilization of ADA at around $0.62 on Thursday, following a bullish breakout, has sparked optimism among traders and investors. This breakout comes as the cryptocurrency market shows signs of recovery, with other altcoins such as XRP and Binance Coin (BNB) recording notable increases. The overall market sentiment appears to be improving, which could provide a favorable environment for Cardano's price rally. However, it is crucial for investors to remain cautious and conduct thorough research before making any investment decisions. The cryptocurrency market is known for its volatility, and sudden price movements can occur without warning. Additionally, the success of Cardano's adoption efforts and the realization of the predicted rally will depend on various factors that are beyond the control of individual investors. Therefore, it is advisable to approach the market with a long-term perspective and a diversified investment strategy.