Struggle looms for Cardano as it aims for $1.20, with sellers steering the current market trend - What are the next moves?
Cardano's [ADA] recent surge in trading volume since early July has fueled a rally, with the cryptocurrency breaking free from a consolidating triangle pattern in the stock market. However, a closer look at CryptoQuant's 90-day cumulative volume delta data reveals an uptick in seller dominance across both Spot and Futures markets. This selling activity could blunt ADA's breakout attempt.
The market cap of ADA is also surging at press time, potentially contributing to the rally. Yet, the surge in trading activity and growing market cap are being questioned as to whether they can overpower the persistent selling pressure in the stock market. Retail traders are re-engaging with Cardano, but the sellers currently dominate the market, exerting downward pressure on ADA.
If sellers maintain dominance, Cardano risks slipping back into consolidation, a pattern that has held since early March. On the other hand, if buying pressure continues to expand, ADA's breakout could extend toward higher resistance levels, with the next target being the $1.2 resistance level.
The current precautionary indicators that could disrupt the uptrend of ADA include its strong correlation with Bitcoin. A Bitcoin bear phase can drag ADA's price down in the stock market. Additionally, market risks such as price volatility, liquidity, regulatory, operational, and macroeconomic factors like global financial markets and political events play a critical role in impacting ADA's performance negatively.
One such macroeconomic factor is the Fed's recent 25bps cut, which could spark repricing in Bitcoin, potentially leading to an October breakout. This could potentially benefit ADA as well, given its correlation with Bitcoin.
The next few sessions are critical for ADA, as they will determine whether the bulls have truly won the battle in the consolidation phase or if the sellers will continue to dominate in the stock market. Comparison between Bitcoin and Bitcoin mining stocks is a topic of current interest, with some analysts predicting a similar trajectory for ADA.
However, it's important to remember that this article provides factual information and does not offer investment advice. Always do your own research before making any investment decisions.
