Cardano (ADA) Price Hits $1.20, Aims to Recoup Past Losses
Cardano (ADA) appears to be bullish. However, the uptrend seems to be experiencing a limitation as there may be several obstacles standing in its way. So traders should be cautious of the ADA coin and the upcoming rally.
What is Cardano?
Cardano is a PoS (Proof of Stake) blockchain that is open source and distributed. Cardano implements peer-to-peer transactions using its native token, ADA. The crypto project was developed in 2015 and released in 2017 by former Ethereum co-founder Charles Hoskinson.
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Cardano is also popularly known as the “Ethereum Killer” because it tries to solve problems related to the Ethereum blockchain.
ADA provides a versatile, sustainable and scalable network for implementing smart contracts. Cardano allows you to develop and implement a wide range of dApps (decentralized applications), cryptocurrencies, games and other projects.
Cardano price is constantly appreciated
The ADA price experienced a 45% downward trend between January 20 and 22, a similar experience to Bitcoin. Although ADA plunged below the $1 psychological level, it did not create a lower candlestick. However, it quickly came back from this level. The ADA token is up 20% from the bottom price indicating that this upward trend will be consistent.
ADA ready for departure | Source: ADAUSD on TradingView.com
While this uptrend is worth considering, the coin will face several obstacles. Rather, this uptick appears to be limited near the $1.22 level, and this is due to the 50-day SMA (Simple Moving Average).
IntoTheBlock’s global in/out model
The transaction data obtained from the GIOM (Global In/Out of the Money) model reinforces this overarching proposition for ADA’s price. The Global In/Out of the Money model, an on-the-chain trading index, showed that approximately 484,540 addresses bought approximately 6.2 billion ADA coins at the regular price of $1.26, and they were “Out of the Money” transactions.
Image Credit: IntoTheBlock
So any buying pressure for day trading that pushes Cardano (ADA) up into this region is going to experience massive bearish pressure.
Also predicting that this rebound will be short-lived is the reduced number of new coin addresses entering Cardano’s mainnet from 73,780 to about 63,310 in the past month. It is worth noting that this 14% drop means that ADA traders are less interested in the coin’s prices at current levels.
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Despite the buying pressures Cardano (ADA) is facing, any denial at both levels could see the altcoin trade as low as $1.
Image from Coingape, charts from IntoTheBlock and TradingView.com