Cardano's Price Action: Mirroring 2021's Surge?
Cardano Price Action Echoes 2021 Rally
Cardano (ADA) has experienced a recent price dip, falling 12.13% in the past month. However, this downturn might be a prelude to a significant price increase, mirroring the pattern observed before its 2021 all-time high. Analysis of ADA's current weekly chart reveals a striking resemblance to the consolidation phase that preceded the previous bull run.
In 2021, after breaking above a key resistance level (illustrated in the chart below), ADA retraced and consolidated before launching to $3.10. Today, a similar consolidation pattern is evident. If this pattern repeats, investors could see gains of 457% from current prices, potentially reaching the previous all-time high.
Source: TradingView
Significant ADA Accumulation
Further bolstering the bullish outlook is substantial ADA accumulation. Data from Coinglass shows that investors have accumulated $379 million worth of ADA over the past seven weeks—39.6 times more than the accumulation seen during a similar consolidation period in 2020-2021. This represents 1.7% of ADA's current market capitalization of $22 billion.
Source: CoinGlass
This level of accumulation could lead to a supply squeeze, potentially driving ADA's price significantly higher. While a return to the $3.10 all-time high is a realistic target, continued momentum could even push the price towards $16.
Positive Market Sentiment
The market's sentiment towards ADA remains bullish, even with the recent price drop. The Open Interest Weighted Funding Rate sits at 0.0086%, indicating a prevalence of long positions in the derivatives market. Sustained long bets suggest that the rally could have further upside.
Source: CoinGlass
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Investing in cryptocurrencies involves significant risk.
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