Despite short-term losses, ADA looks to be on track to repeat its 2023 success.
- Cardano development activity is expected to revert toward the mean after the holiday season.
- The price action showed a bounce from $0.535 is possible.
Cardano [ADA] saw a large downward move on the 3rd of January. This came alongside a Bitcoin [BTC] drop from $45.8k to $40.8k. Despite the short-term losses, ADA buyers were not overwhelmed by the bears.
On the contrary, the prices were trading near a demand zone. The network has performed admirably in 2023, and it is likely to continue that progress in 2024. Here’s what the price charts reveal.
The range low will be important for the buyers
ADA has traded within a range since 14th December, although this only became apparent a few days after that. The range (purple) extended from $0.51 to $0.68.
The mid-range level at $0.595 has served as a strong support level in the past two weeks.
It was breached on 3rd January after Bitcoin experienced heavy losses and dragged the market downward. This move also established the importance of the 4-hour bullish order block (cyan box) at $0.535 for Cardano buyers.
At press time the H12 RSI was moving below neutral 50 to reflect bearish momentum in the market. The OBV was slowly climbing higher since Christmas but the bulls were not overwhelmingly powerful.
The metrics showed strong selling pressure near the year-end
On 27th December, the age-consumed metric saw a large upward spike. It came alongside a swift slide in the mean coin age of ADA. Together, they showed that a large amount of dormant tokens were moved and that holders were selling the tokens.
Read Cardano’s [ADA] Price Prediction 2023-24
The development activity has been high in recent months, but as expected it saw a large slide in the festive season. It is expected to rise back to the usual level soon.
The social volume was also relatively high. The mean coin age metric began to climb as well. Taken together, ADA could likely see another move northward.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
