Cardano’s Current Market Position

As of today, Cardano (ADA) is trading at $0.74, marking a 4% recovery over the past week.On-chain data presents a largely optimistic outlook, fueled by increasing StableCoin market capitalization and a rise in bullish sentiment among traders. However, potential selling pressure from dormant wallets could temper these gains.

Analyzing the Bullish Signals for Cardano

Several factors suggest a potential upward trajectory for cardano.

Surge in Bullish Bets

Data from Coinglass reveals a long-short ratio for Cardano at 1.15, the highest it’s been in a month. This ratio, exceeding 1, indicates a prevailing bullish sentiment in the market, with more traders anticipating a price increase. This contrasts with some sentiment expressed earlier in the year [[2]].

Growing StableCoin Market Capitalization

Another positive indicator is the increasing StableCoin market capitalization of ADA. According to Defillama, it reached an all-time high of $30.77 million recently. This growth suggests increasing utility and adoption of Decentralized Finance (DeFi) applications within the Cardano ecosystem, driving demand for stablecoins.

Technical Analysis Points to Potential Gains

Cardano’s technical outlook suggests the possibility of double-digit percentage gains, provided certain resistance levels are breached.

The price faced rejection at the 50-day exponential moving average (EMA) around $0.77,resulting in a 2.16% decline. This level coincides with a weekly resistance point at $0.74,creating a meaningful resistance zone. Currently, ADA is trading slightly above $0.74.

If ADA can overcome this weekly resistance and close above the $0.77 mark, a 13% price increase could be triggered, perhaps testing the next resistance level at $0.83. This aligns with some predictions for ADA’s potential growth [[3]].

The Relative Strength Index (RSI) on the daily chart is currently at 49, trending upwards towards the neutral level of 50, indicating weakening bearish momentum.For the bullish momentum to sustain, the RSI needs to surpass 50. Furthermore, the moving Average Convergence Divergence (MACD) indicator displayed a bullish crossover, signaling a buying opportunity and a potential upward trend.

Potential Risks: Dormant Wallets and Selling Pressure

Despite the positive indicators, investors should exercise caution. Data from Santiment‘s Age Consumed metric reveals a spike, suggesting that previously inactive ADA wallets may be moving their holdings. This could led to increased selling pressure, potentially driving Cardano’s price downwards.

Conclusion: A Cautiously Optimistic Outlook for Cardano

Cardano currently presents a mixed picture.While on-chain metrics and technical analysis suggest potential for growth, the risk of increased selling pressure from dormant wallets cannot be ignored. Investors should carefully consider these factors and conduct thorough research before making any investment decisions regarding ADA.