en

With Shelley Upgrade on the Horizon, Cardano Posts Big Gains


cryptobriefing.com 2020-05-20 10:30
Reading time: ~3 m

One of the so-called “Ethereum killers,” Cardano, has been posting significant gains over the past week. Still, the market appears quiet on ADA, indicating that the altcoin is poised for further advance.

A Quiet Move Up

According to data from Santiment, Cardano has been “quietly creeping up” as one of the top-performing altcoins over the last few days.

The behavioral analytics platform pointed out that the price of this cryptocurrency surged over 6% in the past 30 hours, and it is up by more than 20% in the past week.

The most intriguing part about ADA’s bullish momentum is that its social volume has remained low as most of the chatter is evolving around other altcoins such as Ethereum (ETH) and OmiseGo (OMG).

Cardano Social Volume by SantimentCardano’s Social Volume by Santiment

The fact that not as many market participants are paying attention to Cardano could be a good thing.

Those who are seeking to “buy the rumor and sell the news” as the Shelley upgrade approaches may still have some time to place their bets.

As speculation mounts around the upcoming hardfork, demand for ADA may shoot up. This could also be fueled by those who want to earn staking rewards as the protocol transitions to a proof-of-stake algorithm.

But before this altcoin takes off, it still needs to overcome a massive resistance wall.

A Major Supply Barrier Ahead of Cardano

IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model reveals that the area between $0.056 and $0.057 could spell trouble for Cardano’s uptrend.

Here, roughly 2,700 addresses purchased nearly 2.5 billion ADA. Such a massive supply barrier could be hard to break, which is why it is key for a further upward advance.

If Cardano’s price is able to punch above this resistance level, then there are few barriers preventing further movement beyond $0.08.

In/Out of the Money Around Price by IntoTheBlock
In/Out of the Money Around Price by IntoTheBlock

From a technical perspective, the Bollinger bands on ADA’s 1-day chart have begun to squeeze indicating that a period of high volatility is underway.

A bullish impulse that allows the token to move above the upper band, might see it advance towards the next resistance hurdles. These are represented by the 23.6% Fibonacci retracement level at $0.06, mid-February’s swing high of $0.072, and the supply barrier previously mentioned at $0.08.

Cardano US dollar price chart

On the flip side, a spike in the selling pressure behind Cardano would likely see it plummet towards the lower Bollinger band hovering around $0.047. There are approximately 25,000 addresses that bought nearly seven billion ADA near this price level, according to the IOMAP.

This area of high demand may prevent ADA from a steeper decline if the selling pressure behind it were to increase. If it breaks, however, the next levels of support to watch out for are the 61.8% and 78.6% Fibonacci retracement levels.

Much of this analysis hinges on the impact of the incoming Shelley upgrade. As market watchers edge closer to the launch date, only time will tell if the momentum will turn bullish or bearish.

OKCoin banner

   Source