Cardano (ADA) saw a 50 percent drop after marking a new yearly high of $0.155 at the end of August. The significant losses that took place over the past month witnessed this altcoin dip to its 200-day moving average, which is now serving as support.
Even though many investors are still hesitant to jump back into the market, various metrics imply that the so-called ‘Ethereum killer’ is prone to rebound.
The TD sequential indicator is now showing a buy signal on ADA’s daily chart. The bullish formation took form as a red nine candlestick, leading to a one to four candlesticks upswing; but if the purchasing pressure behind Cardano is firm enough, it could mark the beginning of a new upward countdown.
Such a bullish premise can be maintained when looking at Cardano’s network growth. Market participants appear to be purchasing substantial amounts of the token, according to the spike in new daily addresses.
Today, almost 6,000 new addresses are joining the network every day, representing a 5 percent jump within the last four days.
The recent unprecedented high in this on-chain metric can be seen as an incredibly bullish signal as it shows an expansion in user adoption over time. Network growth is usually considered as one of the most accurate price predictors, and often, when the network expands for a longer period, rising prices are prone to follow.
Rigid Price Resistance Ahead
On its way up, Cardano may find major resistance between $0.082 and $0.085, with IntoTheBlock’s ‘In/Out of the Money Around Price’ (IOMAP) model showing that almost 11,000 addresses had earlier bought more than 1 billion ADA around this price line.
Such a significant supply barrier may have the capacity to take on some of the purchasing pressure behind this token. If this obstacle doesn’t manage to keep rising prices, the smart contracts tokens could go up towards $0.093.
Here, over 17,000 addresses are holding 1.2 billion ADA.
We should note that in spite of all the bullish signs Cardano shows, prices currently remain on top of weak support.
The IOMAP cohorts show that 8,600 addresses purchased only 274 million ADA between $0.079 and $0.081; therefore, forking through this supply wall may put at risk the bullish perspective and lead to more major losses.