- Cardano wandered around the mid-range resistance in October, unable to reclaim it as support
- A breakout beyond the range highs will likely need more time
Cardano [ADA], at press time, was trading within a three-month range formation. In fact, a recent report noted that the Cardano NVT ratio was at a 5-month high, meaning that the asset may be potentially overvalued.
Despite the rising NVT ratio, however, the $0.366-level has posed stern opposition to ADA over the past month. The altcoin’s demand was not high enough to drive the price beyond this resistance.
Cardano price action in a quagmire
Source: ADA/USDT on TradingView
Cardano has formed a range between $0.393 and $0.311 since July, with the mid-range level at $0.352. This came after the downtrend the altcoin witnessed since March. Such a range-bound consolidation is a good development – The downtrend is arrested and buyers have a chance to accumulate.
A set of Fibonacci retracement levels were plotted using the drop in July and early August. The 50% level at $0.366 has been a thorn in the bulls’ side in October and was also close to the mid-range level. The steady selling pressure was evident on the OBV, which slowly slid lower over the past month.
Consequently, the RSI also meandered around the neutral 50-level, without hinting at strong momentum in either direction.
However, the rejection from the 78.6% level in September was a warning sign on the higher timeframes. The $0.393 and $0.418 levels would be key resistances that must be reclaimed as support before a sizeable rally can begin.
ADA bulls should be aware of a bull trap
Source: Coinglass
AMBCrypto found a significant pocket of liquidity at the $0.371-$0.377 zone. It is likely that this magnetic zone will attract prices to it. It is unclear if the buyers can follow through and make further gains, but the weak demand in recent weeks meant that a rejection from $0.375 might be more likely.
Read Cardano’s [ADA] Price Prediction 2024-25
An impulse move from Bitcoin [BTC] might be required before Cardano can break out of its range and trend higher. At the time of writing, a breakout past $0.4 appeared unlikely.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
