Cardano (ADA) could see its future determined by long-term holders who choose to keep their tokens out of circulation, artificially controlling the supply and demand dynamics. Technical indicators indicate a positive outlook, suggesting a bullish trend for the medium to long term.
In recent weeks, ADA has established strong support at the $0.45 level, with subsequent rebounds confirming this as an excellent buying opportunity. Currently, ADA is trading at $0.4622 after experiencing a 4.5% dip in the past 24 hours. This has contributed to its weekly losses of 24% as the overall market experiences a bearish trend. Over the past 7 days, ADA has been trading within the price range of $0.4175 to $0.6219. With prices revisiting their recent lows, savvy investors will be looking to take advantage of the discounted prices to accumulate more tokens.
On-chain data reveals that long-term investors will have a significant impact on the bullish or bearish trend of the altcoin. Supporting its bullish outlook is a surge in Cardano’s network activity. Data from Santiment shows that the Mean Dollar Invested Age (MDIA) for the past 90 days reached 269 on April 15th. A lower MDIA typically indicates increased activity on the network.
Analyst Ali Martinez has also identified a striking similarity between ADA’s current price pattern and its behavior between 2018 and 2021. This fractal pattern suggests a potential surge of up to 2000% if historical trends repeat themselves. Martinez believes that ADA is consolidating and preparing for an upward movement, drawing parallels with its previous cycle. If the altcoin follows this trajectory, it has the potential to revisit and establish a new all-time high.
However, it is evident that bulls have struggled to break the resistance level at $0.50, which is crucial for maintaining bullish momentum in the long term. Investors should be cautious about the short-term outlook, as the Relative Strength Index (RSI) indicates slow buying momentum and little expectation of a price rebound in the near future.
The Mean Coin Age (MCA) reflects network activity, with a low MCA suggesting new coins are being bought and held, possibly in cold storage. Conversely, a rising MCA indicates existing coins are entering circulation. Interestingly, Cardano’s price has often trended downwards when the MCA increases.
The Elder Force Index (EFI) has plateaued, suggesting that ADA may be consolidating its recent gains. An increase in the EFI could signal a potential breakout in the token’s price, while a decrease in the EFI could indicate a price decline.
In conclusion, long-term holders of Cardano (ADA) have the potential to shape the future of the token through their decisions to keep their tokens out of circulation. Technical indicators point to a bullish outlook, and recent price patterns suggest the possibility of a significant surge in ADA’s value. However, short-term resistance and slow buying momentum raise some concerns. Investors should carefully consider these factors when making their investment decisions.