Cardano price consolidates, but ADA prepares to defy market weakness

  • Cardano price pulls back but remains above the critically important 2018 high of $1.39.
  • On May 25, ADA released from an inverse head-and-shoulders pattern on the four-hour chart.
  • IntoTheBlock IOMAP data shows a cluster of resistance at the 61.8 Fibonacci retracement.

Cardano price has been entangled with the 50 four-hour and 200 four-hour simple moving averages over the last day, but it remains on pace to close May with a double-digit advance and above the 2018 high for the first time in four tries. ADA is being confronted with broader market volatility, but it remains well-positioned to be one of the leading digital assets moving forward.

Cardano price stuck in minor turbulence

In the latest CoinShares Digital Asset Fund Flows Weekly Report, digital assets saw net institutional outflows for the second consecutive week, totaling $97 million and marking a net record for outflows. To provide perspective, it represents just 0.2% of total assets under management (AUM) and pales in comparison to the total YTD inflows of $5.5 billion.

The report did show altcoin inflows totaling $27 million, with Cardano registering the largest institutional inflows at $10 million. It was the second consecutive week of ADA inflows, lifting YTD inflows to $24 million for Cardano institutional investment products. Coinbase suggested that the bullish inflows may “represent investors actively choosing proof of stake coins based on environmental considerations.”

On May 25, Cardano price emerged from an inverse head-and-shoulders formation on the four-hour chart but failed to provoke emotion and commitment from investors, leading to the ongoing pullback.

The pullback has not undercut the Cardano price low of the right shoulder of the formation at $1.42, implying that the breakout remains active at the time of writing. Moreover, if ADA does sell down further, the 2018 high will be formidable support and prompt a strong rebound, despite any residual selling pressure in the market.

The Cardano price breakout resumption would first find resistance at the 61.8% Fibonacci retracement of the May crash at $1.69, followed by a cluster of shadows going back to May 7, around $1.79-$1.89. Further resistance emerges at the junction of the 78.6% retracement at $1.99 with the psychologically important $2.00.

ADA/USD daily chart

If Cardano price trades below the shoulder low at $1.42, it could press ADA to test or slightly undercut the 2018 high at $1.39. A monthly close around $1.35 would leave the green token with a massive long-legged doji pattern, signifying equilibrium between buyers and sellers and a heightened level of indecision. 

Interestingly, the latest IntoTheBlock In/Out of the Money Around Price (IOMAP) data shows a large cluster of resistance (out of the money), formed by 112.62k addresses holding 2.68 billion ADA at an average price of $1.70.

The average price falls right on the 61.8% retracement of the May correction, suggesting that a renewal of the rally could end before it gets started.

Conversely, the support clusters (in the money) are minor in size until the $1.31-$1.36 price range where 94.54k addresses hold 1.40 billion ADA at an average price of $1.34, indicating that a minor burst in selling pressure could close Cardano price below the 2018 high for the fourth consecutive month.

ADA IOMAP data

ADA IOMAP data

Environmental considerations have captured the interest of crypto investors due to the notable impact of mining has on the earth. Elon Musk was instrumental in creating the message when he decided that Tesla would no longer accept BTC as a payment method because of the tremendous power usage, primarily derived from fossil fuels. For Cardano, an ecosystem designed to be environmentally friendly, the awareness is a bullish inflection point for their growth and will reinforce print a period of broader market weakness.

This news is republished from another source. You can check the original article here

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